Every Union Budget is a tightrope walk. Every year, we have almost the same issues to deal with and the same wish lists. Nothing changes while change remains constant.
The big change this year is that for the first time ever, in Indian history, a woman is the full-time Finance Minister of India and she will be presenting the Budget. And she has her task cut out for her.
The current economic scenario is bleak. There is a great mismatch between the optimism which people feel having Modi on a second term while on the other side, they are tight fisted, pessimism and caution reining all decisions. So why isn’t this optimism of Modi as PM getting translated into a robust economy? And that’s the task of Nirmala Sitharaman – instilling a sense of hope, dispelling caution, restore consumer confidence and get people to loosen their purse strings and spend. The Budget needs to make people feel happy enough to kick start the sagging economy.
The current economic indicators are not good:
YoY car sales have dropped 17%
YoY two-wheeler sales are down 11%
Manufacturing PMI is constantly on the decline
Orders are down, output is not picking up and unemployment is high
Actual projects taking off is at a 15-year low
Borrowings of NBFCs has shrunk to less than 5%
Tax revenue has come down – corporate tax collection in May and April was down 51%
Fiscal deficit at 3.4% of the GDP looks daunting
Nowadays no one wants to read and hear bad news; they want to surround themselves with a halo of “all is well.” But the above mentioned are facts and this is the hard truth, like it or not.
Expecting Sitharaman to change this entire scenario in one Budget will be impossible; as such of FY20, one quarter is gone, she has only three quarters to achieve the set targets.
More than more money going into welfare schemes alone, people would like to see tax cuts. Sops to revive Small and Medium enterprises should be a priority. Giving incentives to companies to get more into farm based industries would help boost the farm sector. RBI has done its bit and now it’s the Govt’s turn to ensure that Banks once again start lending. Getting rid of the credit drought should be priority number one. Employment will not happen in one year but if measures are not taken now to boost new investments and project completions, it won’t happen even in 5 years.
Well, hopes are running high. Nationalism apart, people need to eat, earn and live a life. And that’s what we elect a Govt for.