Budget to balance reforms, growth push
Hyderabad: Finance minister Nirmala Sitharaman is expected to follow a two-pronged approach in her ninth Union Budget, which she will present to the Lok Sabha on Sunday, by setting long-term goal posts for the economy and addressing the immediate issues that are stunting the country’s economic growth.
Sitharaman will be matching P. Chidambaram’s record of presenting the nine Union Budgets. She would be one away from levelling former prime minister Morarji Desai’s record of presenting the most Union Budgets. This is also the first time that a budget was presented to Parliament on a Sunday.
The Budget assumes greater significance in the wake of the unprecedented global economic uncertainty and increasing protectionist tendencies being exhibited by developing economies. Sitharaman is likely to announce steps to make India self-reliant in strategic areas such as power, electronics, defence equipment, among others. In other non-strategic areas, the government is likely to take steps to increase Indian companies’ competitiveness.
While the Budget is unlikely to offer any concessions on income-tax, tweaking is expected for custom duties to prevent the dumping of goods by countries like China. The finance minister is likely to focus on encouraging vehicles that run on non-fossil fuel like those run by batteries or hydrogen fuel cells.
With limited room available for front-loading public expenditure through debt, the government may announce steps to reduce non-financial measures such as reducing compliance costs and borrowing costs.
Infrastructure and housing are likely to get a major boost in the budget. While the government may be keen on greater private participation in infrastructure projects, Sitharaman could encourage people to spend on housing, which would have a positive ripple effect across several sectors, including cement, steel, and labour, among others.
Focus could also be directed at reforming education and skilling, as advanced technologies like artificial intelligence, machine learning, and robotics are on the verge of rendering traditional learning modules outdated.
In the wake of the Economic Survey talking about lowering the government equity threshold for public sector companies to 26 per cent, the finance minister is also likely to consider a new wave of disinvestment plans to raise non-debt revenue for the government.
