The
Union Budget was delivered amidst uncertainties over economic growth (nominal
GDP) which was expected to fall below the double-digit mark, revenue the shortfall, rising global uncertainties and muted expectations from the public
at large. The overwhelming majority in the Election 2019 by NDA (especially BJP
crossing the 300 marks on its own) may have raised the expectations from the public at large for a big bang Budget but fiscal compulsion and a reality check
had turned the mindset of people that this would be the Budget that would be
high on 5 year road map and low on near term delivery.
The
FM, given the circumstance, has done a decent job, laying down the broad
guidelines for achieving a $5T economy by 2025. The Government also continued
with its fiscal consolidation path by sticking to the fiscal deficit target of
3.3% for FY20 and the same would be partly financed by borrowing from international
markets. Budget 2019 also focused on attracting overseas money hereby
offsetting part of the problem of lack of capital in the domestic
markets.
Budget
2019 also focused on structural reforms and on behavioral aspects of the
society. It has highlighted the achievements of the last 5 years in terms of
uplifting the large section of the society, taking bold decisions in terms of
bringing path-breaking reforms and focusing on governance.
Budget
2019 is very high in terms of taking path breaking initiatives like indirectly
reducing stake in state-owned enterprises, opening up gates for foreign money
to flow in, taxing the super-rich with higher rates, incentivizing fight
against climate change, igniting skill India, facilitating ‘Make In India’.
To
sum up, Budget 2019 is setting a path for a $5 trillion economy by outlining a host of measures in the area of Make In India, labor reforms, the financial sector
reforms, social impact, enhancing ease of doing business and forcing acclimate
change. However, the focus now shifts to details and execution.
Regards,
Research Team
