New Delhi: Finance Minister Nirmala Sitharaman is likely to show a raise in spending on infrastructure, while presenting her fourth budget today. But as per experts fiscal constraints leave little chance of concessions for households hurting from the pandemic.
The financial year starts from April 1, and the budget for the financial year is likely to announce steps to lift growth beyond 2019 levels after recovering last year from the worst recession since independence.
It is not clear that if Sitharaman will tinker with income tax rates, but many hope that the exemption limit of ₹ 2.5 lakh will be raised amid rising prices of everyday items.
As per the government’s annual economic survey, said India will lead the world in economic growth at 8-8.5 per cent and concluded that it has the headroom to do spend more.
The Budget comes days ahead of Assembly Polls in five states- Uttarakhand, Uttar Pradesh, Goa, Punjab, and Manipur. This might be raising expectations of amped-up rural and agriculture spending.
Asia’s third-largest economy is estimated to expand 9.2 per cent in the financial year that ends in March, following a contraction of 7.3 per cent in the previous one, but the recovery is now seen tapering.
For scaling up the economy to $5 trillion by 2025, Sitharaman is widely expected to continue pushing for large-scale spending in hopes of accelerating investment and jobs.
There are plans to increase the expenditure on infrastructure, experts expect to see a higher allocation for roads, railways and water.
Ease of tax compliance, simplification and digitization as well as ease of doing business are expected to be in focus as are measures to support small businesses.
Healthy tax revenues and an ambitious disinvestment plan may help contain the fiscal deficit to 5 per cent next year.
This year, the fiscal deficit is expected to be 6.3 per cent, below the projection of 6.8 per cent, on the back of buoyant tax revenues, limited spending and higher nominal GDP growth.
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