Union Budget 2023: Will the government give ‘booster dose’ to the private sector in the pre-election budget? Know what the report says
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Union Budget 2023: Finance Minister Nirmala Sitharaman will present the pre-election budget in the Lok Sabha on February 1 amid fears of uncontrolled inflation and an increase in the repo rate by the RBI (Reserve Bank of India). If analysts and media reports are to be believed, neither the government has the fiscal resources nor the global economy is conducive to make populist announcements in the pre-election budget. The geopolitical situation has worsened due to the Russia-Ukraine war. The supply chain is completely disrupted, due to which there is a deep impact on economic activities. The risk of recession in the global economy remains. In such a situation, a question arises that this year’s Union Budget will give a ‘booster dose’ of capital expenditure to strengthen the private sector?
Why private sector needs booster dose
According to a report, more than 10 lakh workers enter the workforce every month in India. Viewed in this context, the government needs to make provision in the budget for higher growth and employment for workers entering the workforce every month. Along with this, there is also a need to increase capital expenditure in the budget to strengthen the private sector. This is because most workers entering the workforce depend on the private sector for employment. In this context, the government will have to work out of the box to provide employment to maximum workforce. Capital expenditure may include purchase of new equipment, construction of factories and buildings, health care expenditure, education outlay, which are important for industrial development and infrastructure and play a significant role in industrial production.
Investors can be given a dose of encouragement
If analysts are to be believed, the budget for the financial year 2023-24 can equally take forward the aspirations and needs of millions of Indians and give a dose of incentives to long-term investors, which do not include actual government expenditure. Global analysts agree with the fact that the election year budget may delay the much-awaited fiscal consolidation and turn it into an advantage. Goldman Sachs said last month that the central government may try to bring down the estimated fiscal deficit in the current year to 5.9 per cent from 6.4 per cent by March 2024, with some reduction in subsidies.
Privatization can be encouraged
It is believed in the media report that in order to give a booster dose to the private sector, the government can make provision for privatization and promotion of private investment in the budget. To increase private investment, the government can approve the privatization of the country’s airports. However, the process of privatization will happen in a phased manner and in the first phase 11 airports have been selected for privatization.
Government can promote indigenous
Apart from this, Finance Minister Nirmala Sitharaman can also make a provision to encourage indigenous production in the Union Budget. To promote Swadeshi, Finance Minister Nirmala Sitharaman can make many announcements in the budget. Along with this, to promote Swadeshi, it can increase the duty on the import of non-essential items. It has been said in the media report that at present the government has prepared a list of 35 such items, whose import duty can be increased.
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