Some expectation from Budget 2021
Published On: Friday, January 22, 2021 | By: Team KnowMyStock
Markets are now eyeing the upcoming proposals in the Union Budget – scheduled to be presented on February 01 – After a stupendous rally that has seen the S&P BSE Sensex more than double from March 2020 low and hit the 50,000 marks. The budget proposals may help revive Covid-19 impacted economy and lift the fortunes of corporate India as well. While most experts suggest the government loosen its purse strings and not worry about the fiscal deficit in a pandemic impacted year, it will be a tightrope walk for the government to increase spending without going overboard. Growth and not fiscal prudence, experts say, should be the priority for the government now.
While the government appears to be willing to spend now, Rs 4.2 trillion of extra spending may be difficult to execute. It may choose to be conservative on gross GDP growth assumptions (say 13 percent), and also target a lower deficit (5.2 percent), which would imply 13 percent total expenditure growth. In this scenario, spending on residual heads could be 40 percent higher than in FY20, but the absolute increase a more reasonable Rs 2.5 trillion. spending in healthcare may see a jump. Additional spend on urban housing can boost urban low-skilled jobs: lack of policy tools to support the urban poor is another lacuna that needs attention. The government may also undertake financial sector reforms.
Tags: Indian budget 2021 GDP
We are on Telegram!
JOIN our telegram channel to receive updates on Financial News and Stock and FNO Tips.
Click Here!
Follow Us On:
