Budget 2021 must reinvigorate demand, boost infra spend, says India Inc
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. Updated: 20 Jan 2021, 05:56 PM IST PTI
India Inc expects the government to continue with its policy focus on strengthening the manufacturing ecosystem, promoting research and development, and incentivising futuristic technologies in the upcoming Budget
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NEW DELHI :
The upcoming Budget must focus on creating demand, encouraging infrastructure spending and increasing outlays for the social sector, India Inc said in a survey released on Wednesday.
India Inc expects the government to continue with its policy focus on strengthening the manufacturing ecosystem, promoting research and development, and incentivising futuristic technologies in the upcoming Budget, the survey by Ficci and Dhruva Advisors said.
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After dithering on a fiscal stimulus package for nearly a year, India’s finance minister Nirmala Sitharaman has declared that she will not allow the fiscal deficit number to worry her too much as she pushes spending to revive growth in the upcoming budget.
The government hopes that growth will generate higher tax revenues which will help meet its debt obligations in the coming years. Most economists say that the government does not have any other choice at the moment but caution that the borrowed funds need to be well-spent. Else, the stimulus would be wasted, growth would remain weak, and India could end up in a stagflationary trap. In such a scenario, burgeoning debt would weigh down Asia’s third largest economy amid weak growth and high inflation.
The central bank s plan to suck out Rs. 2 lakh crore in a term repo auction triggered a jump in shorter duration rates including the tri-party repo rates (TREP), sovereign treasury bills, and inter-bank call money rate.