Annual Economic Survey of India for Budget  and Union Budget expectations on sectors

 

Finance Minister Nirmala Sitharaman presented the economic survey of India today. It is an annual economic survey presented a day ahead of Union Budget.

The Economic Survey gives a detailed account of the economy, its prospects, and the policy challenges. It sates the sector basis reviews and measures that are required to put the sector back on track. It is actually required to make the future policy moves and for economic growth.

 

Economic Survey of India:

The Economic Survey projected the GDP growth for FY20-21 at 6-6.5%.

The economic survey demands more reforms for making easier to do business in the country.

Survey suggests relaxing fiscal gap target to revive growth

The Economic Survey viewed current fiscal growth at 5%, and further said that the fiscal deficit target for the current FY may have to be relaxed to revive growth.

The industrial growth within the financial year (FY) 2019-20 estimated at 2.5%, Economic Survey mentioned.

Agriculture and allied sectors to grow at 2.8% in the coming fiscal year, growth in current year estimated at 2.9%: Economic Survey The survey reiterates govt’s specialize in doubling farmers income by 2022

Economic Survey for tax collection: The FY20 tax collections to be less than estimate. Improvement in tax mop-up hinges on GST revenue buoyancy

Government committed to support MSME sector for better Credit Flow, Tech Upgradation, EODB and Market Access

Economic Survey for Infrastructure: Total investment in roads & highways has gone up quite 3 times in five year period of 2014-15 to 2018-19.

India needs aggressive disinvestment of CPSEs to bring in higher profitability, promote efficiency, increase competitiveness, and promote professionalism

The theme of this year’s survey is wealth creation and therefore the cover is of lavender color

 

Union Budget 2020 expectations

The Union Budget can be the key trigger to decide the Indian market volatility ahead. This time it will be a crucial one as it will clarify the path for economic growth. There are always high expectations from the Union Budget particularly when the economy is in slow growth.

Amidst the high expectation of reforms and tax relief, the government has to articulate to achieve the task of maintaining the growth for current slowdown and fiscal discipline. We have seen that the government had announced several stimulus packages in the mid of 2019 and the room for fiscal stimulus from here is limited.

 

We have made a list of Union Budget Expectation for 2020:

 

Tax Proposal	· To provide relief on LTCG tax and DDT to cheer the stock markets. · LLPs and Foreign Companies applicable tax rate should be revisited as per the recent tax structure for domestic companies
BFSI	·Small and Medium NBFCs should be refinanced by MUDRA ·Increase benefits on Co – lending to promote co-lending among banks and NBFCs.
Agriculture	·Both short and long-term measures needed to promote indigenous edible oil.
Renewable Energy	·Impose Basic Customs Duty on Cells and Modules
Automobile	·GST cut on vehicles from 28% to 18%. ·Incentives for electric and hybrid car private buyers.
Housing & Real Estate	·Increase the deduction limit of interest paid on home loans to Rs. 3,00,000.
Metals	·Reduction in duty on import of Petroleum Coke, Anthracite Coal.
Healthcare	·Provide Import duty relief for lifesaving equipment.
Oil & Gas	·Promote the diversification of crude oil sources and take up the issue of Asian premium with OPEC.
Power	·Continue tax incentives to new investment in the power sector by way of profit linked incentive or capital deduction.

 

 

Conclusions:

The Economic Survey of India 2019-20 has highlighted the importance of reforms in achieving the USD 5 trillion GDP target. The expectation is that economic recovery will start H2 FY20 onwards marking the beginning of a 12 quarter trade cycle.

Above, we have mentioned the sector-wise expectations from the Union Budget 2020.  The Union Budget is going to be presented by Finance Minister Nirmala Sitharaman tomorrow 1st of February and the stock markets are open like normal day.

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