As the finance ministry enters into the Union Budget preparation mode, The Prime Minister’s Economic Advisory Council on Thursday cautioned against the next Budget projecting unrealistically high tax revenue or tax buoyancy numbers even though the economic growth is expected to be on the higher side of 7-7.5%.
“Looking beyond the current year, 2021-22, Members were optimistic about real and nominal growth prospects in 2022-23. Other than an element of the base effect, the contact intensive sectors and construction should recover in 2022-23. Once capacity utilisation improves, private investments should also recover. Therefore, Members felt a real rate of growth of 7 to 7.5% in 2022-23 was likely,” the council headed by Bibek Debroy said.
The Union Budget for 2021-22 was applauded because of reform measures, as well as transparency and realism in the numbers.
The council members were of the view that these dimensions should be carried forward into the 2022-23 Budget too, signalling the use of the extra revenue in the form of capital expenditure and human capital expenditure, since Covid has led to a human capital deficit.
There should also be a clear roadmap for privatisation and the growth orientation of last year’s Budget should also be maintained, they said.
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Published 18 November 2021, 17:10 IST
