The Union budget exercise takes centre stage on the political scene for the first quarter of each calendar. This year it is generating more interest, both in India and overseas, in the backdrop of the impact of demonetisation on the economy, the Centre-state logjam over the GST regime, impending elections in five states, surge in international crude oil prices and falling commodity demand. Finance Minister Arun Jaitley will be balancing multifarious expectations with the current budgetary exercise. With the Model Code of Conduct (MCC) coming into effect for state elections, the Government’s move to advance the budget proposals by one month has already generated an intense debate.
The upcoming Union budget is the Modi Government’s fourth, and the industry cries for economic and tax reforms are louder than ever. In terms of priority sectors which are likely to feature high on the FM’s agenda, ‘agriculture’, ‘infrastructure’, ‘railways’ and ‘manufacturing’ emerge as the front runners; the netizen vote on the Finance Ministry’s Twitter handle resonates with this list. Insofar as the budgetary allocations are concerned, it is likely that the FM may loosen the fiscal deficit target for 2017-18 to 3.5 per cent of GDP (as against three per cent of GDP), to accommodate enhanced spending on priority sectors.