InvestorQ : What are the broad expectations from the Union Budget to be presented by the Finance Minister on 01 February 2021?
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What are the broad expectations from the Union Budget to be presented by the Finance Minister on 01 February 2021?

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vidhya Laxmi answered.
4 weeks ago
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The full set of budget expectations is yet to crystallize and that should happen gradually over the next couple of weeks. However, as a first step to the process, some of India’s leading economists and business association leaders have presented a broad charter of demands to the Finance Minister, Nirmala Sitharaman.

With the Union Budget 2021 just over a month away, many of the leading Indian economists have urged the Finance Minister to go ahead and relax fiscal deficit constraints on the budget. They have also asked the FM to put aside the FRBM or the Fiscal Responsibility Act on the backburner for the time being at least till growth revives in the economy.

Another major demand from the Finance Minister is to look at ways and means to boost exports out of India, especially since the growth in exports has failed to keep pace with the growth in imports. In the process the trade deficit has also widened substantially to inch closer to $10 billion. This is one of the main goals of the Atma Nirbhar plan.

In addition, the economists also called for increasing the spending on primary health and focusing on agriculture infrastructure. In fact, primary health investments will be mandatory in the post COVID scenario. Economist have gone to the extent of pushing these expenses despite fiscal deficit constraints, although that does look quite impractical.

Fiscal deficit for the financial year had crossed the budget estimates of full year target by 20% by end of October. The final fiscal deficit is expected to be closer to 8% of GDP. Meanwhile, representatives of industry bodies urged the FM to boost demand via lower personal income-tax rates as it would increase the tax base and also the tax-to-GDP ratio.

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