Government can afford to make a new long-term plan, says Romesh Tiwari of CapitalAim
Modi 2.0 needs new modified MNREGA type schemes to boost the Rural economy
The first full Union Budget under the second tenure of the Modi government is scheduled to be presented on July 5 2019, by the Finance Minister Nirmala Sitharaman. Due to the Lok Sabha elections that were conducted during the month of April and May, the government tabled an interim budget in February 2019.
The Union Budget is the comprehensive report of the government's finances along with consolidates revenues from sources. The budget is constructed by the budget division of the Ministry of Finance post consultation from other branches of ministries.
Since it is the first budget of the Modi government in its second run, people stretching from taxpayers to economists have voiced their expectation from the Union Budget that will be presented in less than three weeks. Romesh Tiwari, Head of Research, CapitalAim states the reasons that will have an effect on the Union Budget which in turn will have an impact on the overall economical anatomy of the country.
Romesh Tiwari comments, "Modi 2.0 needs new modified MNREGA type schemes to boost the Rural economy and pump up the consumption as earliest as possible. Attempt to achieve fiscal deficit target will deepen the crisis in Investment scene for the long term."
"Investors, in general, are realizing the need for immediate reforms to deal with the mess of bad loans piled up with banks and stalling investment cycle. Its time to move the Make in India concept from papers to a realistic long-term policy."
He further adds, " The US-China tariff war is an opportunity that can immensely help the Indian manufacturing sector if this budget includes an investment-friendly policy and faster clearances for new manufacturing units. Increase in government expenditure with a focus on reviving rural economy and infrastructure projects does not leave any room for reducing the fiscal deficit in this budget. Besides, the investors are expecting some reforms in the upcoming budget also."
"As the first budget out of 5 expected budgets, this government can afford to make a new long-term plan that starts from this budget and can be continued to a more inclusive and sustainable growth. With the mess around big bad defaults and the opacity of system, the future will be more unpredictable unless the government makes them liable and accountable towards the investors' trust. A rising mismatch between availability of medical facilities and lifestyle-related chronic diseases is affecting a big proportion of the workforce. An affordable and widely accessible plan for public healthcare policy is expected in this budget. An unambiguous message and a simplified policy for boosting the growth of Small and Micro businesses is the optimum way to attain the more equitable distribution of income and a consistent decrease in the unemployment rate." he adds.
He concludes, " One of the dream projects of Narendra Modi that could not be implemented in his previous stint. This budget is high time to start implementation on this ambitious project that has the potential to start the process of an all-inclusive long term systematic growth. Hence, a lot of bold steps, as mentioned, are the investor’s community looking forward to and in case the government fails to address these concerns and tries to balance the fiscal deficit first, it will disappoint the community in large scale."