'With contraction of government deficit, there will be more room for private investment and capital inflows. Low levels of inflation will also benefit the government in the medium term by reducing the cost of fresh borrowings of the government of India, resulting in reduction in interest payout,' the medium-term fiscal policy strategy statement had stated. … [Read more...] about Budget must provide a realistic road map
When Finance Minister Nirmala Sitharaman presented her first budget in July 2019, which was also the first Budget of the Narendra Modi 2.0 government, she began with an optimistic outlook for a “New India” that was on its path to become a $5-trillion economy in a few years. In the events that have transpired since then, especially with the shock of COVID-19, the goal has taken a significant setback. As Sitharaman prepares to deliver her third budget this year in the backdrop of the pandemic, she shoulders the unenviable responsibility of extricating the economy out of its worst crisis and putting it back on course to the targets that the government had set for itself.There have been recurrent themes in Nirmala Sitharaman’s approach in her past budget documents and stimulus packages, which could provide crucial learnings for the upcoming budget. First, is the focus on infrastructure spending as a means to provide a fiscal stimulus to the economy. In 2019, the budget … [Read more...] about Budget 2021: Lessons for the Finance Minister from past Budgets
An appropriate framework of the FRBM is, therefore, critical for finance ministries, and to not pursue fruitless binaries like austerity and expansion, but provide an organising framework for policy formulation and execution with an emphasis on the what and not just the how much. … [Read more...] about Economy requires a BATTLE PLAN!