From the average man to industrialists, everyone expects Finance Minister Nirmala Sitharaman to unveil measures that would put the economy on a more solid basis in the Union Budget on February 1. However, economic limitations have forced the administration to walk a tightrope while making middle-class compromises.
RISING INFLATION
Subsidies for LPG and kerosene are minimal in the fiscal year 2021-22. According to brokerage company Jefferies, there is no anticipation of a cut in excise duty on petrol and diesel or the inclusion of natural gas under GST in this year’s budget.
The Reserve Bank of India faces an urgent problem in managing inflation, according to HSBC’s pre-Budget projections.
GROWING UNEMPLOYMENT
According to Reuters, the economic recession has pushed the jobless rate over the worldwide number in five of the previous six years, but the main issue is a drop in labour participation as discouraged job seekers try to go elsewhere instead.
Former RBI Governor D Subbarao stated that the next Budget 2022 should prioritise job creation and bridging the economy’s widening disparity, in addition to boosting development.
INCOME TAX RELIEFS
Amid the Covid-19 outbreak, taxpayers anticipate that the government would increase the basic income tax exemption limit of Rs 2.5 lakh and revise the top income bracket of Rs 10 lakh and above. The salaried class also wants the present section 80C deduction ceiling of Rs 1.5 lakh to be increased.
ECONOMIC OUTPUT
In the fiscal year 2019-20, India’s yearly GDP dropped to a decade low of 4%, a year before the pandemic pushed it further lower, setting a record drop in economic production.
However, Asia’s third-largest economy is expected to expand 9.2 percent in the current fiscal year, which ends in March, after contracting by 7.3% the previous fiscal year.