Though the Union Budget is to be presented only on Friday, July 5, and thereâ€™s a lot of confidentiality maintained as far as Indian budgets go, some clues are available from answers the Finance Minister has given in the Rajya Sabha. Members of Parliament asked questions and Nirmala Sitaraman has submitted a written response to one such question on the economy by an MP in the Rajya Sabha. Some parts of her response indicate what direction the budget may take on certain areas of the economy.
One of the key takeaways from the Finance Ministerâ€™s reply to the question is the seriousness being attached at the top levels of the Indian government to the issues of encouraging investments, particularly in sectors that can create more employment. The budget therefore may have something special for sectors like textiles and real estate, considered largest employers in the country. What type of incentives are offered to these sectors to boost investment and employment remains to be seen. The government has been holding discussions with experts from diverse fields to gather their opinions on what all can be done to kick-start the economy. The minister has also referred to the five-member cabinet committee on investment and growth chaired by the Prime Minister that has been constituted to address the issues.
On the recent decline in the GDP growth, the Finance Minister has attributed it to the farm sector stress. She has however added that even at 5.8%, the Indian economy was growing faster that the rates of growth recorded by countries like US and China.
The corporate sector would hope that there would be reduction in the tax rates. The roadmap for gradually reducing the rate of taxation for corporate entities had already been laid down by the previous Finance Minister Arun Jaitely. It has to be seen what the new thinking on that is, with the new government.
On the issue of wilful defaults, the reply placed in the Rajya Sabha by Finance Minister Nirmala Sitaraman says Rs 1.5 trillion worth of loans have been classified as â€świlful defaults" in FY19 by the state-run banks, with the SBI accounting for as much as Rs 46,158 crore of this amount. PNB and Bank of India stand second and third in terms of loans defaulted from their books.
The FM has disputed the claim that the governmentâ€™s demonetisation move in 2016 had been responsible for the decline in the countryâ€™s economic growth.