With the Union Budget 2018 just round the corner, top voices and industry captains alike are sharing their respective concerns and areas of focus. Interestingly, the experts seem to be divided on whether this year’s Budget will be populist or reformist. “Clearly, in the last year of its term, the government would like to consolidate on major steps taken than opening up of any new front. Steps could be taken to progress things that have been done in the past few years,” S Krishna Kumar, CIO-Equity, Sundaram Mutual Fund told CNBC-TV18 in an interview.
He expects the government to stay on course with fiscal (discipline) and allocate to schemes on rural development and job generation. The house is betting on the rural sector ahead of the budget. “We have increased allocation towards the rural theme in the last two years. Agro chemicals, sugar, tea and tractors are parts of the portfolio,” he told the channel. The expert added that he doesn’t expect the budget to be ‘aggressive.’
Global credit rating agency Moody’s says that the reforms in India may lose steam in 2018 ahead of the Parliamentary elections. “A busy election schedule will slow reform momentum in some Asia Pacific economies. In Indonesia and India, regional elections are also likely to slow down any reform momentum. Both countries also have parliamentary elections in 2019,” the rating agency said in outlook for sovereign creditworthiness in Asia Pacific in 2018.
Earlier this week, amid predictions that the government will frame the Budget keeping in mind the 2019 elections, Niti Aayog Vice Chairman Rajiv Kumar defended Prime Minister Narendra Modi, saying that he never made any Budget to win elections.
“It’s up to the Finance Minister & the Prime Minister to take a call on suggestions given to them, but if anyone is under the impression that this last Budget (of the present government) will be a populist one, then they’re wrong. The Prime Minister never made a Budget to win votes. It will be made to benefit common man & boost economy,” ANI quoted Rajiv Kumar as saying.
After the Gujarat Election, which the BJP won by a narrow margin, Assocham predicted the Budget to be a populist one. “In the run-up to the 2019 Lok Sabha elections, states including Rajasthan, Madhya Pradesh, Chhattisgarh and Karnataka are due for polls in 2018. Inevitably, it would be the popular voters’ sentiment that would be factored by the Centre and the state governments in their policies,” Assocham had said.