Today, the newly appointed Finance Minister Nirmala Sitharaman is going to represent her first budget in the Lok Sabha, balancing growth requirements and fiscal constraints. It is likely to say that Ms. Sitharaman is going to provide a glimpse of the five-year of Prime Minister Narendra Modi’s government which was voted back to power in Centre for the second time in last months election.
Yesterday the government, presented the annual economic survey in which it predicted that in the current year, the economic growth may get back up to 7 percent but warned that it will face challenges keeping its fiscal deficit in check. The Finance Minister started the big day by ditching the British-era briefcase for a red cloth folder enclosed with a string and emblazoned with the national emblem – which was described by officials as the “bahi khata“
Here are the top ten developments on Budget 2019:
1. The new budget may increase spending at the cost of short-term slippage in fiscal deficit targets.
2. According to many people, the Finance Minister may help the common people by raising the personal income tax threshold for certain categories and increase spending on agriculture, healthcare, and social sectors.
3. There is likely to be a big push for infrastructure spending including on roads and railways also follow to drive growth which had slowed to a five-year low of 5.8 percent in the first three months of 2019.
4. In factory output and automobiles sales, there has been reflected a slowdown in numbers. Slowing trade, rising protectionism, the trade conflict between the United States and China, Brexit, US sanctions on Russia, Iran and Venezuela have weighed down the economy too.
5. The slow-moving has caused expectations of the budget proposing stimulus measures to boost growth through new policy initiatives and reforms to aimed to boost growth and employment.
6. The estimate is supposed to be in the form of a combination of capital infusion in public sector banks, removing the roadblocks that have crept into the Insolvency and Bankruptcy Code process which will give liquidity to non-bank financial companies.
7. For Ms. Sitharaman the major constraining factor is lower-than-expected growth in tax revenues, especially those of the goods and services tax (GST).
8. However, the budget deficit may increase the gross domestic product or GDP up to 3.5 percent instead of 3.4 percent.
9. Recently, the scope of the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) was expanded to cover all farmers which would lead to an increase in expenditure from the earlier budgeted Rs. 75,000 crore to Rs. 90,000 crore along with a new pension scheme.
10. Moreover, Ms. Sitharaman has to keep the promise of the relief that she made to small taxpayers in the Interim Budget in February.