Tag: indian budget

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. Read more

The GOI is likely to lay down a road map in the upcoming Budget to reduce its fiscal deficit to 4 percent of gross domestic product (GDP) by 2025-26. This is necessary because there will be demands for expansionary policies, even in the next couple of years. This implies the government is set to deviate from the long-standing medium-term target of 2.5-3 percent of GDP as prescribed by amendments to the Fiscal Responsibility and Budget Management Act (FRBM). The government had changed the recommendations of the N K Singh Committee on fiscal consolidation and targeted bringing down the fiscal deficit to 3.1 percent of GDP by 2022-23 (FY23). However, to enable widen the fiscal deficit beyond the permissible limit under the present legislation, the government may have to propose an amendment to the FRBM Act in the Finance Bill.