As expected, the last Budget (before the next general elections) presented by FM Mr Arun Jaitley focusses on key themes, namely Rural (Agriculture and allied activities), Health, Social Causes, Education and Infra, with the aim of providing ease for citizens living in India. In the process, he has taken the liberty of a higher fiscal deficit of 3.3% for FY19, raising fears of economists and analysts.
The Government aims at providing maximum opportunities in rural areas by spending more to improve the livelihood of inhabitants’, Agriculture and allied activities, and also the creation of rural infrastructure. It will ensure payment of the full amount of MSP, even if farmers sell below this price. The emphasis is on generating farm and non-farm employment for farmers.
Mr Jaitley has tried to deftly balance economics with politics. He had a tough call of treading carefully between the need for stimulating growth and continuing on the path of fiscal consolidation.
The key issues on which the Budget should be evaluated include:
The measures taken to accelerate growth
The question of whether inflation (and hence interest rates) is likely to reverse/come under control soon
How strong is the commitment of the present Government towards fiscal prudence to enable the country’s fiscal situation and facilitate a sustainable improvement in the Debt-to-GDP ratio
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