The government might not be spending a lot given that it had already set a target of keeping the deficit below 3.5% in next fiscal. It might still go for 3.7%-3.8% deficit and increase spendings.
As the budget day nears, most people are discussing about its impact on their personal as well as country’s finances. Mostly, people are divided between the 2 camps. One is pro-growth and wants the government to give up the idea of fiscal prudence and spend more to revive sagging growth. Other camp is of view that not sticking to lower deficit targets might not translate to higher growth.
But the government seems to be in favor of taking a balanced approach. This will mean that it will be presenting a budget that is growth-oriented and maintains the growth momentum without spending more than what is necessary. This will address the concerns of corporates about government not spending enough in view of falling private investments. It is also expected that most big-ticket announcements will be to facilitate job creations.
The government might not be spending a lot given that it had already set a target of keeping the deficit below 3.5% in next fiscal. It might still go for 3.7%-3.8% deficit and increase spendings. But anything more would threaten the financial stability of the economy. So expectations of a big-bang investment led reforms will not be realized in this budget.
RBI has also made it clear that it is in support of government not breaching the deficit target of 3.5%. But there are many who believe that the emphasis should be on growth and not fiscal consolidation. One of the key drivers of the budget will be government’s ability to raise money from various sources. In a slowing global environment, India is being seen a symbol of growth. The budget should therefore focus on retaining India’s position as a place of economic stability and also, of one which is working hard towards ensuring a sustained future growth.
But the government seems to be in favor of taking a balanced approach. This will mean that it will be presenting a budget that is growth-oriented and maintains the growth momentum without spending more than what is necessary. This will address the concerns of corporates about government not spending enough in view of falling private investments. It is also expected that most big-ticket announcements will be to facilitate job creations.
The government might not be spending a lot given that it had already set a target of keeping the deficit below 3.5% in next fiscal. It might still go for 3.7%-3.8% deficit and increase spendings. But anything more would threaten the financial stability of the economy. So expectations of a big-bang investment led reforms will not be realized in this budget.
RBI has also made it clear that it is in support of government not breaching the deficit target of 3.5%. But there are many who believe that the emphasis should be on growth and not fiscal consolidation. One of the key drivers of the budget will be government’s ability to raise money from various sources. In a slowing global environment, India is being seen a symbol of growth. The budget should therefore focus on retaining India’s position as a place of economic stability and also, of one which is working hard towards ensuring a sustained future growth.
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