New Delhi: As the Finance Minister Nirmala Sitharaman is all set to present the Budget for the fiscal year 2022-21 on February 1 in the Parliament, the economic experts expect that the budget will focus on growth over fiscal consolidation by boosting spending.
A survey held among leading economists in the country by Bloomberg gives an outline of what can be expected in the budget, which is widely observed, particularly in the wake of State Assembly elections.
The survey expects that the Finance Minister will likely increase the budget by about 14% year-on-year to Rs 39.6 lakh crore for the next fiscal for which extra income will probably to be amassed by selling state-owned assets and a near-record borrowing of about Rs 13 lakh crore while keeping the tax rate nearly unchanged.
It is expected that with the increased expenditure, the budget deficit will remain wider than 6% of gross domestic product. The economists are of the hope that Nirmala Sitharaman will be targeting a fiscal gap of 6.1% of GDP next fiscal year after ending the current year with a 6.8% shortfall to see economic growth outsmarting the pandemic.
While the economy is in the revival mode from the pandemic impact that has increased the unemployment and widened the inequalities, it will be challenging for the Finance Minister to step up spending on everything to create employment. Oxfam is recommending the government impose a 1% surcharge on the richest 10% of the population to invest in health and education.
Wealth has surged for the rich globally during the pandemic as the value of everything from stock prices to crypto and commodities has jumped. India, where urban unemployment jumped close to 15% last May and food insecurity worsened, now counts more billionaires than France, Sweden and Switzerland combined, according to Oxfam.