When Finance Minister, Nirmala Sitharaman will present the Union Budget 2020-21 in the parliament, it will the first financial yearly plan in the new decade. The budget is quite significant in a sense that it comes at a time when the country’s economy is going through a very challenging time. India’s GDP growth rate is predicted to be at about 5.5% in 2020-21 FY by various international organizations, including the UN. From the manufacturing sector to banks, almost every shaft of the Indian economy is facing clampdown.
When the FM readies to present the budget on February 1, she will have a lot to fix. As predicted by various market experts, the budget might be the most startup-friendly till date. Since the country’s economy is widely run by foreign corporations, and not many Indian startups have been able to compete with global giants, the government is expected to infuse a huge amount of money in Prime Minister Narendra Modi’s flagship program – Startup India.
In the past few years, Digitalization has been at the forefront of the government’s plan, and is expected to get some leverage in the upcoming budget. Although Reserve Bank of India has taken a number of steps to better the money transmission, what it needs to do is cut the loan rate so that common people don’t have to hesitate to investing and lending. In order to restore the automobile industry, the budget needs to be friendly towards the companies.
After demonetization, the country has seen a significant boost in digital transaction and income tax collection. What the government should do is promote small-scale industries. The village economy, which still runs more or less on cash, needs to be updated with the online world, not just for digitalization but also for creating various ways to do business.