02-02-2021 01:39 PM | Source: Sushil Finance Ltd
Budget 2021-22 - Timely Inoculation of Growaccine By Sushil Finance Ltd
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EXECUTIVE SUMMARY

* The Union Budget 2021 comes at a time when India and the world is battling the Corona virus pandemic and the economy is on a path of recovery from the after effects of the lockdown.

* The FM presented the Budget 2021 with an anti-climax of hope of growth revival, dream of AtmaNirbhar Bharat and fear of tax-hike and climaxed into high hope for recovery, strong aspiration of growth and dreams of billion of Indians.

* The government’s clinical development of phase I, PM Garib Kalyan Yojana to phase II, III, IV, AtmaNirbhar 2/3/4, met with the right efficacy in terms of better tax collections, strong recovery in growth as well as corporate profitability and return of animal spirits in India Inc., culminated well in the form of successful development of the vaccine, the Budget 2021, which may help accelerate growth, increase profitability and help in job creation.

* The Budget 2021 set out a strong growth path by taking bold steps of raising higher debt in the short term, thereby, avoiding tax hike, accelerating strategic divestment drive, proposing privatization of two nationalized banks and a general insurance company. It also focused on inclusive growth, providing basic infrastructure, better health and education to all.

* Budget 2021 has estimated the fiscal deficit at 9.5% for 2021 and 6.8% for 2022 deviating from the FRBM act in the year of pandemic and aimed at returning to the fiscal consolidation path by 2025-26. It has proposed a suitable amendment to the FRBM act to accommodate the new normal.

* The economic survey has estimated a 7.7% contraction in GDP for 2021 and 11.0% growth in real GDP for 2022. It also estimates nominal GDP growth of 15.4% implying an assumption of 4.4% of inflation during 2022.

* Budget 2021 proposed enhancing capital expenditure to Rs.5.54 lakh crores to ensure that for India the target of becoming USD5Tn economy is well on track. The same will positively impact infrastructure, connectivity of tier II cities, job creation.

* The Budget 2021 also supplements Make in India vision of the government, Production Linked Incentives Schemes, new customs structure from October, 2021 and review of 400 customs exemptions, are some of the steps taken in that direction. The message is clearly towards increasing domestic manufacturing.

* To sum up, Union Budget 2021 has laid out a strong path of growth and revival for the economy, the focus now will shift to the timely execution of the proposals and buoyancy in tax-collection assumed in the Budget. The growth assumption will also depend on continuation of global growth drivers that may act as a big tailwind for Indian economy that is now well integrated into world economy

 


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