INSUBCONTINENT EXCLUSIVE:
Finance Minister Nirmala Sitharaman will probably increase the budget by about 14%.India, which is set to regain the world's fastest-growing
major economy title, will likely prioritize growth over fiscal consolidation by boosting spending, according to economists surveyed ahead of
Tuesday's presentation of the nation's Union Budget.Finance Minister Nirmala Sitharaman will probably increase the budget by about 14%
year-on-year to Rs 39.6 lakh crore ($527 billion) in the fiscal year beginning April, according to the median of estimates compiled by
She is expected to leave tax rates largely unchanged, and instead rely on income from asset sales and a near-record borrowing of about Rs 13
lakh crore to partly fund the plan, the survey showed.Elevated expenditure will, for yet another year, keep the government's budget deficit
wider than 6% of gross domestic product
Economists predict Sitharaman will target a fiscal gap of 6.1% of GDP next fiscal year after ending the current year with a 6.8% shortfall,
thanks to looser spending to see the economy through the pandemic.“The recovery from the pandemic has been swift but incomplete,” Dhiraj
Nim and Sanjay Mathur, economists at Australia - New Zealand Banking Group Ltd
“A fine balancing act between fiscal retreat and economic recovery is thus needed.”With curbs to stem the omicron variant of Covid-19
fanning unemployment and inequalities, Sitharaman will be under pressure to step up spending on everything from infrastructure projects to
health care in a bid to create jobs and pull people out of poverty
Oxfam is recommending the government impose a 1% surcharge on the richest 10% of the population to invest in health and education.Wealth has
surged for the rich globally during the pandemic as the value of everything from stock prices to crypto and commodities has jumped
India, where urban unemployment jumped close to 15% last May and food insecurity worsened, now counts more billionaires than France, Sweden
and Switzerland combined, according to Oxfam.Most survey participants see Sitharaman desisting from any populist steps in the budget despite
the ruling Bharatiya Janata Party heading into key state elections next month, even as expectations are growing that she will change some
tax rules to boost foreign demand for India's sovereign debt.Scrapping the capital gains tax on bond investors will advance India's case for
inclusion in global bond indexes, which HSBC Holdings Plc estimates could pave the way for as much as $40 billion of foreign inflows
It can also ease domestic pressure given expectations of near-record borrowing by the government just as the central bank winds back some of
its pandemic-era monetary stimulus.Most respondents see the manufacturing sector emerging as the biggest beneficiary of the budget, with few
economists expecting any major gains for the country's dominant services and agriculture sectors
At the same time, they think it's the poor who would benefit the most from the government's growth-boosting policies.The budget will
continue to support the rural sector “via employment generation and higher fertilizer subsidies,” said Gaura Sen Gupta, an economist
“The focus of fiscal policy will shift from near-term relief measures to strengthening engines of growth -- consumption and investment,”
