The year 2020 saw a drastic dip in India’s GDP and other economic factors. All of it was pertaining to the health crisis prevailing in the country due to which many businesses shut down and people lost their means of livelihood. Thus, the Union Budget of 2021 is a ray of hope for many citizens.
On Monday (1st February), the Finance Minister of India Nirmala Sitharaman will be presenting the first paperless budget. Many eyes are glued to this year’s budget as citizens look forward to Prime Minister Narendra Modi to increase the demand and investments in an economy that is on its recovery path after being a country drastically affected by the worldwide health crisis.
PM Narendra Modi’s growth-centric plans will be put forth by Nirmala Sitharaman when she will deliver the budget speech today. The citizens are hoping that the government will set aside more money for health care and infrastructure development in the country.
They are also hoping that the government will partly pay for these requirements by raising record amounts by selling stakes in state-run companies. As of now, the success of India’s Union Budget 2021 depends on how effectively the country will manage to curb the spread of infections through the vaccine drives in full-swing.
The nation is on a drive to vaccinate more than 1.3 billion people via its vaccination drive. Here are five key numbers the citizens are watching out for in Nirmala Sitharaman’s spending plan 2021.
The International Monetary Fund (IMF) has forecasted India’s economy will expand 11.5 percent in the year starting April 2021. This figure is higher than the 9.2 percent estimated by the Bloomberg survey.
Furthermore, if we add around 4.5 percent inflation to those projects, we get a nominal gross domestic product (GDP) growth rate of nearly 14.5 percent to 16 percent. This number is one of the key aspects of the budget Bloomberg survey.
With the lockdown measures being lifted in the majority of the country, India’s tax collection has shown an uptick lately. This will give FM Nirmala Sitharaman a reason to collect overall tax revenue at a level greater than Rs 16.3 lakh crore budgeted for the current year.
As per the expectation of Citigroup, they are expecting 19 percent year-on-year growth in gross tax revenue next year. It expects GST to average Rs 1.15 lakh crore a month next fiscal -- translating into nearly Rs 14 lakh crore in total for the year.
The Finance Minister will also be forced to increase the budget’s expenditure on infrastructure projects to the social sector and health care as the labour market crippled due to the lockdown restrictions.
The sale of stakes in state-run companies will also pave the way to raise money in the new financial year. The government might also carry forward its plan to raise Rs 2.1 lakh crore via divestment in the current financial year. It will do so by unloading shares in firms including Life Insurance Corp. of India.
Citigroup is also expecting the Modi government to double non-tax revenues from around 6 trillion rupees next year from around Rs 3 lakh crore penciled in for the current period. Another source of earning will from the auction of 5G airwaves.
Overall, the other factors people are looking forward to is relief in tax measures and change in tax slabs as well.