What to expect from Budget 2021?
The upcoming budget will be strongly influenced by the pandemic backdrop in which it is being presented. While there is limited near-term fiscal leeway and discretion, it can be an opportunity to set solid long-term foundations to achieve sustainable economic growth. Primary focus areas must include improving capital availability and allocation. While the immediate growth will depend on household and government consumption, we expect steps to boost overall savings. Also needed are genuine steps towards attracting private capital and improving governance at public sector banks than yet another recapitalisation. With external balances and inflation in control, a more ambitious infrastructure build spending can be pursued. Further concessions for the real estate sector will help improve the employment outlook and also help drive a savings cycle. On the ‘Atmanirbhar’ theme as well, the focus should be on putting together the essential long-term growth building blocks, such as incentivising the creation of strong Intellectual Property, apart from including more sectors in the PLI scheme. Lastly, there’s still a lot to be done on simplification of the tax codes and hopefully, more steps will be taken in this regard: Nitin Sharma, Director Research, Fidelity International
The quote was originally published in www.financialexpress.com in January 2021.
The opinions expressed are author's own. Fidelity International is not responsible for the author's opinions.