Budget 2022 News Live Updates: Main challenges FM Nirmala Sitharaman needs to address in Budget 2022

Finance minister Nirmala Sitharaman will present the fourth Budget of the Modi 2.0 government today. The stage for the Budget presentation was set by the Economic Survey stating that the government has the fiscal space to do more to support the economy that is forecast to grow at a healthy 8-8.5 per cent growth in the 2022-23 fiscal. Now, the focus of the Budget is expected to be on further accelerating India's pace of recovery from the pandemic shock along with further boosting up India's healthcare system to secure against any future outbreaks. The government will continue to spend more to aid the recovery and put India back on a trajectory of higher growth.

Latest on the Budget

• Economic Survey projects economy to grow at 9.2% in the current fiscal, forecasts FY23 real GDP growth at 8-8.5%.
• The Budget Session of Parliament began today with the address by President Ram Nath Kovind to both Houses in the Central Hall
• The Budget Session is scheduled to conclude on April 8 wherein the first part of the session will extend up to February 11
• The Union budget 2022-23 to be presented by finance minister Nirmala Sitharaman on February 1 will be in paperless form
• No 'Zero Hour' on 31st January and 1st February
• No ‘halwa’ ceremony this time around amid Omicron worries
• Strict Covid-19 protocols will continue in parliament

Budget expectations

• Healthcare industry seeks priority status, increase in fund allocation to 3% of GDP
• Some experts are anticipating changes in income tax slabs and rates
• Budget 2022 will be MSME and export oriented, says FIEO
• Budget should focus on amping up health infra, say experts
• Fintech industry hopes for incentives in Budget to push financial inclusion
• Scheme to develop 700 districts as export hubs on the cards
• The realty sector is pinning high hopes on Budget to boost market sentiments
• Economy may need more hand-holding, fiscal correction can wait, shows a recent report
• Budget to aim at boosting growth, achieving fiscal consolidation, says BoB eco research
• Real estate sector expects tax relief, industry status from Sitharaman
• Experts want Budget to focus on bridging widened inequality in economy and create jobs
• Pharma industry wants Budget to announce incentives for conducting R&D

Budget and Markets

• Market watchers believe that despite the higher target divestment for the upcoming financial year in the Union Budget, LIC IPO will be the key for the targets.
• Though market sees volatility pre and post Budget, net-net, the event hardly leaves any impact in the two-week period
• Centre is likely to miss the targets of divestment and the strategic stake sales in FY2021-22
• Market experts believe disinvestment and privatisation are likely to gain further traction
• Crypto startups seeking clarity over issues like taxation, legislation, exemptions and regulations
• Analysts do not see any change in capital gain tax on equity

Economic indicators

• NSO data and the third-quarter results emanating from the corporate sector paint a picture of cautious optimism
• Key challenge to strike a balance between supporting the growth by reviving the dormant private consumption and investment demands while containing inflation
• According to the NSO, the real GDP in the year 2021-22 is expected to be Rs 147.54 lakh crore registering a growth rate of 9.2%
• The Purchasing Managers' Index for services is back to pre-Covid levels
• Exports and imports have registered high growth rates, and so has the trade deficit
• The nominal GDP is expected to grow almost at 18%, about 3.5 percentage points higher than the budgetary estimates
• The direct tax revenue is expected to be beyond budget estimates for this year
• Private final consumption expenditure, estimated at Rs 80.8 lakh crore for the fiscal year, remains about three percent below the Rs 83.2 lakh crore in 2019-20

Expert opinion

"We clearly need to leverage on our strengths as a country in terms of the huge consumption potential that we have; the ability to take advantage of the relocation of global value chain or even on the services side of the economy, there is a lot of scope in terms of digital penetration, lot of scope on food processing, new technology, new sectors, green tech etc.
- Sonal Varma, Nomura’s Managing Director and Chief Economist, India and Asia ex-Japan

"Costs have really gone up in recent times. We have to improve consumption demand by steps such as augmenting rural income through increased allocation on MGNREGA, rural infrastructure creation, etc. A focus on improving the health infrastructure and subsidised credit to SMEs and contact intensive sectors is really important.
- Pawan Munjal, Vice President, CII


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