Updated: December 15, 2020 8:42:54 am
Sitharaman will present the Union Budget 2021-22 in Lok Sabha on February 1, 2021. (Photo: PTI / file)
Finance Minister Nirmala Sitharaman held her first pre-budget meeting with major industrialists on Monday (December 14), amid expectations that the government will present a growth-oriented budget to boost the recovery of the economy of the effects of the Covid-19 pandemic.
Meetings with industry chambers will be followed by two days of consultations with stakeholders from the financial sector and capital markets.
What do these queries imply?
In addition to holding internal discussions on various key Budget numbers, such as nominal Gross Domestic Product (GDP), projected fiscal deficit, and income and expenditure accounts, the government meets with leaders and stakeholders from all sectors such as industry. , the financial sector, agriculture and the social sector to incorporate their contributions and suggestions in the budget preparation exercise.
Inter-ministerial consultations are also held on various policy issues that could be addressed through the budget.
The Budget is like a government financial plan for next year; provides various financial numbers for the current year and makes projections for the next year.
Fiscal policies and the government’s intention and vision of the reforms are also articulated through the budget.
Sitharaman will present the Union Budget 2021-22 at Lok Sabha on February 1, 2021.
Why will the budget for next year be unusual?
The Budget will come in the context of the Covid-19 pandemic, which made the current year’s budget exercise largely redundant.
The government had to announce frequent policy changes and deviations from key parameters, such as the fiscal deficit, market loans, to cope with the evolution of the economic situation. The economy posted its worst contraction in the April-June quarter, and for the full year economists now project a contraction of 7-8%.
But a strong rebound is expected next year with low / negative base annual growth.📣 Follow Express explained on Telegram
Next year’s budget will need to balance the need to boost growth and increase spending on infrastructure, while at the same time looking for ways to increase government revenue.
It will also take into account the recommendation of the Fifteenth Finance Committee regarding the tax refund to the states, and their suggestions on several other crucial issues, such as the issue of defense spending.
The government is expected to fall short of its fiscal deficit projections. It is expected to adopt the concept of “range” on issues of fiscal deficits and debt levels, rather than the currently prescribed “fixed point” targets.
© The Indian Express (P) Ltd
.
