Union Budget 1998-99 was the maiden budget of the newly elected coalition government led by the BJP. There were apprehensions about the economic philosophy of the new government indicating the possibility of a reversal of tax reforms introduced in the earlier budgets. The Finance Minister sought to achieve a wide ranging array of highly ambitious objectives and in the process ended up presenting a budget that lacked focus. An attempt has been made in this paper to present a broad macroeconomic analysis of the main proposals of the Union Budget 1998-99 and examine the likely impact of the budget proposals on Indian economy. An attempt has also been made to present the post-budget macroeconomic scenario for Indian economy for the year 1998-99.