Budget Expectations: The General Budget 2023-24 will be presented in the Parliament on 1 February. Prime Minister Narendra Modi’s government will present the budget on February 1. This will be the last full budget of the government before next year’s general elections. There are huge expectations from industry to economic institutions and sectors regarding this.
Government will achieve the target of fiscal deficit in the current financial year – Goldman Sachs
The government will achieve the target of keeping fiscal deficit or fiscal deficit at 6.4 per cent level in the current financial year and it may come down by 0.50 per cent in the next financial year. The emphasis is expected to be on fiscal consolidation in the budget. This has been estimated in the report of a foreign brokerage company. In the budget for the financial year 2022-23, the fiscal deficit has been estimated to be 6.4 percent. Finance Minister Nirmala Sitharaman recently said that she will achieve the fiscal targets as per the budget. The reason for this is that the tax collection is more than the targets fixed in the budget.
Government able to manage the impact on commodity prices
American brokerage company Goldman Sachs said in its report on Tuesday that due to the rise in commodity prices, expenditure on food grains and fertilizer subsidies had to be increased. Beyond this, the scope created for the government at the exchequer level in the form of more tax revenue could not be maintained. Apart from this, the government also placed a demand in Parliament mainly regarding capital expenditure, rural development and additional expenditure in the defense sector. The report expressed hope that the government would be able to maintain the fiscal deficit at 6.4 per cent of gross domestic product (GDP) as per the target set in the budget. The additional subsidy due to the rise in commodity prices is likely to be compensated by the budget.
Increase in fiscal strength due to higher tax revenue
The brokerage company also expressed hope that the fiscal deficit is expected to come down by 0.5 per cent in the financial year 2023-24. The reason for this is the reduction in food and fertilizer subsidies and higher tax revenue. That is, it means that the country is going to move forward on the path of fiscal consolidation. This expectation is tied to direct and indirect taxes. Tax collection in both the items is expected to exceed the budget estimate. However, the government may miss the disinvestment target.
Government’s emphasis on limiting debt from the market
The brokerage company said that the budget is expected to choose the path of fiscal consolidation in the medium term with an emphasis on capital expenditure, manufacturing stimulus, while debt from the market may be limited to such an extent, that there will be an adverse impact on the market. Did not fall
There will be more emphasis on capital allocation in roads and railways
This budget is being presented before the elections. In such a situation, the government will increase the capital expenditure allocation for infrastructure mainly in roads and railways. On the other hand, there can be a reduction in defense expenditure and there will be an increase in allocation for the rural sector and welfare measures like education and health. Fiscal deficit is the difference between total income and expenditure. This deficit tells how much the government will have to borrow from the market to meet the expenditure target.
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