Budget 2019 Expectations: India a $5 trillion economy? Steps FM Nirmala Sitharaman may take to achieve that
Budget 2019 is almost on us, presentation is on July 5, and the country is waiting anxiously for major announcements from which they would derive benefits. The ball is in FM Nitmala Sitharaman court now.
Budget 2019 is fast approaching and the Finance Minister Nirmala Sitharaman would be under pressure to come up to the expectations of the captains of industry and the public at large. Modi 2.0 cabinet has envisioned to turn India into a $5 trillion economy by 2025 and with this being the first Budget of the government after the general elections, much would depend on the direction it sets. However, to achieve that, she urgently needs to look at the current banking system, its style of lending and borrowing so that the long-term projects, especially into the infrastructure sector and major job-creating sector like manufacturing don't get affected. As per the industry insiders who represented the delegations that met the Finance Minister ahead of the budget 2019, Nirmala Sitharaman may focus on the liquidity issue that the industry is facing. They say that the Modi 2.0 government is well convinced that liquidity is the major issue and if it is solved, the rest of the issues would automatically get solved.
Speaking on the matter Dr. Niranjan Hiranandani, Senior Vice President at ASSOCHAM said, "Today, the Indian industry is facing the liquidity crisis and all other issues have germinated because of that." One reason for such a crisis when the banks have enough of funds in their hand after the RBI has cut down the Repo Rates by 25 bps on three successive occasions from February to June Monetary Policy Review meetings, Dr. Hiranandani said, "This is happening because our banks are borrowing money for short-term and lending for the long-term. It has led to rising in credit risk."
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On what could be the possible tool that FM Sitharaman may announce in this budget to handle this situation, he said, "She might take any such decision that would increase more players in the banking sector as we witnessed in case of ICICI and IDBI, which were earlier term-lending institutions."
On his part, Kishan Jain, Director, Goldmedal Electricals said, “We are hopeful that the government would continue the good work it began carrying out in its first term with regards to GST, Make in India, and the host of initiatives it has undertaken in the power and FMEG sector. In the upcoming budget, we also expect that the Government continues its keen focus on improving India’s infrastructure as this coupled with ease of doing business would ensure India becomes a $5 trillion economy by 2025 as envisioned by the Prime Minister."
He added, "Additionally, I am confident that the Government will continue to promote manufacturing in India through its ‘Make in India’ initiative as this would not only provide a boost to Indian companies but also aid in creating more employment opportunities.”
Jitendra Chaturvedi, Director & Co-Founder, Batooni Mobile Advertising said, “The economy has seen tightening of regulations in the past few years. Now the time has come to unleash the animal spirits of entrepreneurs and let a million businesses flourish. We need a jungle of new businesses and ideas that generate employment for a large number of semi-skilled people, and not curated gardens that favor a few. I hope this budget reduces the compliance burden so that businesses may focus more on growth.”