Key Reasons Why This Year’s Budget is Crucial for Every Indian
Here are some key reasons of why this year's Union Budget is all the more important and critical for policymakers and consumers of policy. In order to embark on Fast Track of Economic Growth, Mrs. Sitharaman has a lot to say in this Union Budget, writes Faiz Askari.
Why this year’s Union Budget is Important? With this quest, we found some interesting facts that make this year’s union budget all the more critical as compared to the previous year’s budget. Unlike previous few years, this Union Budget, by women Finance Minister of India, this may sound yet another women empowerment-oriented statement but it has a lot of weight. In India, the majority of households have women as their key decision maker specially with regards to daily financial issues.
There are other reasons for this budget to turn out to be different since it provides a unique opportunity for the new Modi government to address the multiple challenges facing the economy. This is the time when GST has started making some comfortable outcomes visible into the system.
Bringing India on Fast Track Economic Growth
It is widely expected that the Union Budget will have a slew of measures that, if played out in full, will support growth both in the short-term and in the long-term. It may be noted that economic expansion during last fiscal has slowed down to a five-year low of 6.8 per cent, with growth for the running fiscal (2019-20) pared down substantially by the Reserve Bank of India.
We, therefore, believe that the Finance Minister will seize upon this opportunity to reboot economic growth and the Budget 2019-20 will, and can, act as a catalyst for growth for a slowing economy, given the strong political mandate for the government that ensures stability in polices which is a necessary condition to spur economic growth.
Ensuring GST Stability with a Discipline
The Budget may be personally important for the Finance Minister since it gives her a unique opportunity to prove her mettle as she has stepped into the shoes of her more illustrious predecessors, but she has a daunting task of bringing back growth while maintaining fiscal discipline.
The GST have showing positive outcomes but has also witnessed huge amount of disruption among small businesses. This budget can address this aspect and has all the possibilities of impressing these small businesses which are normally termed as MSMEs of the country.
MSME Funding & Credit Mechanism
Yet another golden chance for the Finance minister to not just impress over 6.5 million MSMEs but also to the whole world by making the Indian credit and finance flow smooth and incentive driven towards entrepreneurs.
While growth remains the dominant theme, options to raise resources to fund a slew of supporting programmes and welfare schemes that were already announced by the government, remains a key issue. With the government crossing the half-way mark of the budgeted fiscal deficit through the first two months of this fiscal, the Finance Minister will have to look for other means to raise resources.
There is also a fair chance that the private sector may find it difficult to raise funds in the wake of increased government borrowing and a tight liquidity scenario in the economy set off by the corporates deleveraging their balance sheets following the IL&FS crisis. This fact is also to get addressed by the finance minister in her budget speech.
Job Creation through MSMEs
We have been saying this for long, that Prime Minister Narendra Modi’s vision for creation of jobs can only be fulfilled through MSMEs. Their enablement can reflect wonders into the economic growth and job growth. Here is another chance for this element to be worked upon.
Industry is also expecting Hon’ble Finance Minister to clearly spell out the divestment policies, including those of strategic public sector undertaking (PSU) divestiture and un-utilised land assets with state-owned undertakings.
We are expecting some major announcement in the form of new schemes or extension of existing schemes in the area of of insurance, healthcare, education, environment, startups and of course MSME Finance. This also covers pension schemes, healthcare insurance, Skill Development, Startup funding, Mudra Scheme etc.
Taxation restructuring is also expected to make some major attraction in the Budget speech. Defense and infrastructure are definitely going to be special attention area for the finance minister.