New Delhi: India is eagerly waiting for 1 February, as Finance Minister Nirmala Sitharaman will table the Union Budget amid expectations that large scale relief measures will be announced to revive Covid-hit economy.
According to sources, Nirmala’s plan will likely rely on generous public spending to spur activity, putting more money in the hands of the average taxpayer to boost consumption and easing rules to attract investments when she presents the budget at 11 am in New Delhi. ‘It will be a budget like never before,’ said highly placed sources.
Although the government’s revenue position is tight due to higher spending and lower revenue collections during most parts of 2020, it may have no choice but to spend more in order to bring the economy back on the growth track. A report recently indicated that spending in the upcoming budget will increase by 12-14 per cent. This translates to around Rs 35 lakh crore.
Reports said missing deficit goals will be the least of the worries for Prime Minister Narendra Modi’s government. It has to contend with creating jobs for the millions who lost their livelihoods to lockdowns to combat the world’s second-largest coronavirus outbreak, quelling protests by farmers against agriculture reforms and reviving growth in an economy headed for its biggest annual contraction on record.
Many economists have said that the government will have to go for higher public spending to boost growth. Putting more money in the hands of the average taxpayer may be a part of the government’s plan as it remains focused on increasing demand.
India’s GDP will shrink 7.7 per cent in the year ending March, according to the Statistics Ministry. The Finance Ministry estimates GDP will likely expand 11 per cent next fiscal year.