Facing the worst economic slowdown in more than a decade, Nirmala Sitharaman is expected to pull out all stops to spur consumer demand and investment.
Union Finance Minister Nirmala Sitharaman is presenting her second Union Budget for the financial year 2020-2021 in Parliament on Saturday. A cut in personal income tax, sops for rural and agriculture sectors as well as an aggressive push on infrastructure spending are likely to be part of Finance Minister Nirmala Sitharaman’s “feel-good” second Budget. Facing the worst economic slowdown in more than a decade, Sitharaman is expected to pull out all stops to spur consumer demand and investment, according to government sources and economists.
Finance Minister Nirmala Sitharaman said “Our commitment to making sure that the taxpayers are respected had to be given some kind of expression”
Sitharaman is also expected to announce measures to restore economic growth and to set out a clear road map for achieving the ambitious target of a $5 trillion economy by 2025.
Investments have failed to pick up despite corporate tax cuts and other stimulus measures, higher FDI inflows, plans to consolidate state-owned banks and monetary easing.
Amid expectations that the Narendra Modi government will bring the Indian economy out of a slump by boosting growth, finance minister Nirmala Sitharaman tabled the Union Budget 2020-21 in the Lok Sabha today. While the common man is expecting income tax rate cut, the industry is pinning hopes on bold initiatives to revive economic growth.
Pradhan Mantri Kisan Urja Suraksha and Utthan Mahabhiyan (PM KUSUM) to be expanded to provide 20 lakh farmers in setting up standalone solar pumps.
Shares of agri-related companies gained after Nirmala Sitharaman said that the government committed to doubling farmers income by 2022. Shares of Mahindra & Mahindra gained 2%, Jain Irrigation 5%, Escirts 1%, Godrej Agrovet 3.5%, Shakti Pumps 7%.
Nirmala Sitharaman may loosen fiscal deficit targets, as recommended by Chief Economic Advisor KV Subramanian in the Economic Survey.
The Union Budget is unlikely to have any state-specific schemes as the Election Commission has asked the government to refrain from announcing such schemes before Delhi elections.
Congress chief spokesperson Randeep Surjewala said the last budget led to crashing consumption levels, soaring unemployment and falling GDP.
India’s GDP is expected to rebound and grow at a rate of 6 to 6.5% in the next financial year 2020-21, according to the Economic Survey released yesterday. Nirmala Sitharaman is India’s second woman finance minister.
The Modi government could defer the earlier target of cutting fiscal deficit to 3% of GDP in 2020-21 by at least two years.
Economists in a Reuters poll predicted the government would set a deficit target of 3.6% of GDP for 2020-21, up from 3.3% targeted for the current year.
Dressed in a crisp yellow silk sari, Nirmala Sitharaman came to the Parliament carrying the Budget documents wrapped in a red silk cloth, adorned with the Indian emblem in golden.
Share market traders are cautious ahead of Budget as the Sensex slumped over 200 points in opening trade but rebounded later on. At 10:10 am, Sensex was at 40,775.00, up by 51.51 points or 0.13%, while the NSE Nifty was at 11,969.90, up 7.80 points or 0.07%.
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