Finance Minister Nirmala Sitharaman will present the Union budget in the parliament today, its widely projected that the Narendra Modi-led government is likely to seek to lower its fiscal deficit while encouraging investment by offering incentives.
The central government is also expected to ramp up state spending to counter the global slowdown.
Officials believe that in spite of upcoming elections in many states and next year’s Lok Sabha polls in the background, major relief for households may not be on the cards due to fiscal cards as the budget is likely to focus on long-term growth.
Sitharaman is expected to continue the Modi government’s policy of increasing capital spending on public infrastructure, introducing lower tax rates and labour reforms and more subsidies to the poor in a bid to win their support.
The finance minister is likely to announce around 10% to 12% increase in budget allocations for health, education and rural projects as many insiders believe that the annual budget will continue the economic reforms started by Prime Minister Narendra Modi since coming into power in 2014.
BJP economic affairs spokesman, Gopal Krishna Agarwal, pointed out that the easing of retail inflation, higher state spending and growing bank credit would help the economic recovery ahead of Lok Sabha elections.
However, critics have claimed that Modi government’s economic policies have majorly benefited large companies while burdening the middle class with more taxes who are facing a dip in growth in real income and jobs.
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The Economic Survey released by Sitharaman on Tuesday warned of effects of global slowdown and forecasted that the economy would grow 6% to 6.8% year-on-year next fiscal year, down from 7% projected for the current year.
Chief Economic Adviser (CEA) V Anantha Nageswaran projected that India’s economy was poised to do better and expected to grow at 6.5-7 percent till the end of the decade. Nageswaran said that the inflation is likely to be “well behaved” in the coming fiscal year barring any unforeseen factors.
The International Monetary Fund (IMF) has projected India’s growth to dip slightly from 6.1 percent to 6.8 percent during the current fiscal year ending on March 31. IMF also expects some minor slowdown in the Indian economy in the next fiscal year.
According to the January update of the World Economic Outlook released by global fiscal body on Tuesday, global growth is projected to fall from a projected 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024.
Union Budget 2023: 5 big expectations from Nirmala Sitharaman
Union Budget 2023: Budget to be presented today at 11 am, know the full schedule here