Union
Budget 2020 Expectations
The buzz for the Union
Budget 2020 has been humongous. People have been speculating and coming up with
their own cause and effect theories. All people are expecting is an efficacious
budget plan that will revive the economy and get it on the right track.
In a situation like ours it
is difficult to decide which sector needs to be prioritized and which can be
secondary where the allocation of budget is concerned.
The sharp lag of consumption
and investment has been alarming which played a role in the revenue shortfall. The
economic slowdown has intensified as a result of this the government is likely
to cut down on spending.
Weak corporate earnings
were also a contributor to the shortage of revenue. It is a challenging budget
for finance minister Nirmala Sitharaman and she may face a difficulty in balancing
whether to stick to fiscal consolidation or run a higher deficit to push
growth.
As far as investors are
concerned they are waiting for a tide of opportunities to make through the
ongoing fiscal scenario. An improvement in the business climate is awaited
cautiously. The budget should implement policies to boost start-ups more than
it already has. The potential in the public sector should be tapped in this
budget.
Removal of long-term
capital gains (LTCG) tax on equity mutual funds is highly anticipated and will
do more good than harm to the mutual fund investors. There is a significant
opportunity for development in the global financial markets.
The news of cut in tax rates is spreading like
wildfire and raising people’s expectations. It leaves more disposable income in
the hands of the middle and lower middle-income group. This is an opportunity
to prod demand which will oil the rusty issues of consumption. This will help
to pick up investments as well.
To improve the investment
climate in the country the immediate priority of the government should be higher
domestic consumption which can be supported by bettering the infrastructure. This
will raise demands in other sectors like steel, cement, etc. Another upside to
this will be the increase in employment opportunities which will solve a lot of
problems for the country, one of them being the falling GDP.
How we can revive the
economy after taking these steps is by triggering investment cycles where the
fiscal expansion is such that we do not have to worry about the fiscal deficit
slippage leading us to sustainable growth. The corporate sector has massive
untapped potential that can save the economy from any more wreckage. The right
allocation and execution can prove to monumentally stabilize the current
scenario.
We hope that the Finance
Minister will address all these concerns in her 2nd Union Budget presentation
and nudge the economy back on track.
Shahera Qureshi
Sushil Finance
Has rich experience as a content writer. She has
worked with Bombay Stock Exchange (BSE) and has graduated in BMS. She is an
avid reader and has impeccably proficient research skills.