Budget 2022 LIVE: Finance Minister Nirmala Sitharaman is set to present the Union Budget 2022 on February 1 at a time when India continues to reel from the coronavirus pandemic. The disruptions from the pandemic weighed heavily on India’s fiscal metrics last year, with the central government’s fiscal deficit rising to an all-time high of 9.2% of GDP in FY21. However, the story changed in FY22 with better-than-expected tax collections. As things look relatively promising from a growth perspective, some reduction in pandemic-related spending could be on the cards. Tax buoyancy may further allow the government to go for fiscal consolidation this year. That said, the Indian economy remains fragile and growth, volatile.
With Assembly elections in four states and one Union Territory getting closer, the Centre could also go for some populist measures while continuing with higher spending to boost economic recovery.
Earlier this week, the International Monetary Fund (IMF) slashed India’s economic growth forecast for the financial year 2021-22 from 9.5 per cent to 9 per cent on concerns over the impact of the new Covid variant.
Read More: Budget expectations 2022 LIVE: Jobs, tax reduction amid pandemic, and more