FM Nirmala Sitharaman's upcoming budget may be unlike anything seen in the last 100 years
Published On: Wednesday, January 20, 2021 | By: Team KnowMyStock
FM Nirmala Sitharaman has described her upcoming budget as unlike anything seen in the last 100 years. Prime Minister Narendra Modi’s government has been parsimonious in pump-priming the economy, for fear of a rating downgrade to junk, and may find that kicking the can down the road is no longer an option. When Finance Minister Nirmala Sitharaman presents her budget on Feb. 1, she will not only aim to repair battered government finances and ensure demand recovers in an economy facing its worst contraction since 1952. She must also revive declining revenue and restore millions of jobs lost during the pandemic. That will be crucial to boosting consumer sentiment in a country where local demand contributes nearly 60% of gross domestic product.
Also India’s exports are losing their share in gross domestic product (GDP). And for a considerable period, low oil prices were a key reason for this. But it also means that non-oil exports slogged during that phase. Into the pandemic, exports improved in Q2, but may not have risen greatly in Q3, assuming no change in quarterly GDP from last year’s level.This performance could be the worst among select emerging economies in 2020 according to , the IMF estimates. For a well-rounded economic recovery, exports are crucial, but are limited by a new wave of Covid-19 that is affecting global demand. Strategic incentives through the Budget may help boost exports.
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