Union Budget 2020: India to unveil budget for economy in need of growth boost

By Vrishti Beniwal
India’s finance minister is set to deliver her budget speech on Saturday, seeking to give a boost to the economy while keeping fiscal risks under control.

Finance Minister Nirmala Sitharaman will likely outline measures to spur spending in rural areas and lower tax burden for individuals, home buyers and equity market investors. Her budget speech is scheduled to start at 11 a.m. in New Delhi.

Sitharaman is expected to loosen India’s fiscal deficit goal, in line with a recommendation by her top economic adviser. The budget gap for the year to March is likely to widen to 3.8% of gross domestic product from a planned 3.3%. A Bloomberg survey shows the target for the next fiscal year will probably be 3.5%.

The deficit will likely be funded by a record market borrowing of 7.8 trillion rupees ($109 billion), according to a separate Bloomberg News poll. The finance minister may once more turn to the Reserve Bank of India for a higher dividend, and look at receipts from strategic sale of state-owned companies to bridge the funding gap.

India’s benchmark S&P BSE Sensex Index fell 0.5% Friday, capping its worst January since 2016.

Growth is likely to rebound to 6%-6.5% in the year starting April from an estimated 5% in the current year, according to the Economic Survey, a report card of the economy presented to lawmakers by Sitharaman Friday.

The budget will lay the road-map for revenue generation and expenditure next year, after the government probably missed this year’s targets on account of the slowdown.