Mumbai: The next budget is expected to focus more on strengthening growth rather than worrying more about the fiscal deficit. A Wall Street brokerage report stated this. Bank of America Securities India expects the budget deficit target for fiscal year 2021-22 to be kept at around five per cent of GDP and at 7.2 per cent in the current fiscal. According to this report, fiscal deficit figures are relatively higher due to increased capital expenditure, recapitalization of public sector banks, steps for real estate, tax cuts for low-income groups and the creation of bad banks. But can remain high.
Economists of the organization hope that the government will fulfill these needs by cessing the debt as well as higher income groups and through some non-fiscal measures.
The report expects tax cuts for low-income people to increase consumption, measures to boost demand in the real estate sector, recapitalization of public sector banks, expansion of the MSME credit guarantee scheme and structural reforms.
In the upcoming budget, a domestic financial institution may be announced to fund port, road and electricity related projects.
It is noteworthy that Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2021-22 on February 1, 2021. Earlier on Friday, the Economic Review for the financial year 2020-21 was presented in the Lok Sabha.