Budget 2016
The most awaited day of year- 29 February when finance Minister will present Budget 2016 in Parliament.Parliament. Pre-budget time is always heated up with discussions like expectations of budget, economic conditions, GDP etc.There are a lot of speculation going about how the budget will be for different strata of society and different sectors.Well few days will reveal answers to all these questions.For now lets consider what are the situation/factors/incidents etc which FM should keep in mind while drafting budget
- Private investment has dried up,Investors sentiments are weak thus challenge is to accelerate investments to review growth while maintaining a balanced fiscal deficit between 3.7 to 3.9 % of GDP
- Jittery conditions of market, Rupee at its 30-months low
- Falling oil prices and inability of government to pass the benefits to common men
- Slow of global economy due to depreciation of yuan, uncertainty in fed rates
- Exchequer will incur high expenditure due to implementation of OROP and recommendation of 7th Pay Commission
- Political differences between the government and the opposition have disrupted the usual course of parliament, in all budget should be healthy one in order to avoid future criticism and issue
- Budget should be growth driven giving emphasize on common men
- It should be a forward-looking budget must ensure India will be a haven of stability and growth in a very turbulent and choppy global environment
- Arun Jaitley will have to look for ways to revive investment and boost rural demand while keeping in mind the fiscal constraints
- Bad debts of banks,Volume of Non Performing Assets
- Budget should be pro and friendly to various schemes announced by Government like Start-up India, Make in India, Digital India,Skill India etc
- This is last year of 5 year plan hence budget should be aligned towards unmet targets of 5 year plans
- Reforms that could set the tone for tax policy and help in bridging the gap in tax xollection are needed
- Considering the fact that GST cannot be implemented with effect from April, budget should come up with alternative approach to GST
- More clarity is expected on indirect transfer tax and General Anti Avoidance Rule(GAAR)
- Two consecutive years of drought have led to a collapse in farm sector output, which is down from 4.2 per cent in FY14 to -0.2 per cent in FY15. Farm output is estimated to grow at a tepid 1 per cent in FY16
- Only 23 million households were provided employment in fiscal 2015 as compared with nearly 50 million in each of the preceding 5 years, budget should lead to job creation and increasing purchasing power of common masses
These are some points which Finance Ministry will consider while drafting the budget 2016.
With weak macro economic scenario global economy in distress, there lies a sweet spot for India.And the budget should prove to be a tipping point to lead India to achieve rapid economic growth.
