The Modi government was reportedly working on a new industrial policy which would specifically focus on the MSMEs and technology sectors.
Budget 2019-20 to pose two key challenges before Modi government! Prime Minister Narendra Modi has entrusted Nirmala Sitharaman with the crucial responsibility of the Finance Ministry. As the preparations for Budget 2019 have already started, Sitharaman has a tough task on her hands. The two primary challenges she would face in the upcoming Budget 2019 are capital infusion in the financial sector and freeing up resources for infrastructure push, according to an IE report. Nirmala Sitharaman is the first full-time female Finance Minister of India.
After assuming charge, the immediate challenge before FM Sitharaman is to look for resources for investing in the infrastructure sector. Apart from this, she would also need to find ways to inject fresh capital in banks. In the upcoming Budget 2019, there is also a need to provide support to Non-Banking Financial Companies (NBFCs), which are liquidity-starved, the report said. To address the tight fiscal situation, the central government may need to rely on the Reserve Bank of India even as the central bank is also looking into the liquidity issue. There is a possibility of RBI opting for additional liquidity-boosting measures by changing its stance, the report said.
The Union Finance Ministry has already held discussions on the Budget 2019 and the focus is on carving fiscal space to pump capital investment of around Rs 25 lakh crore per annum in the infrastructure sector. The central government is reportedly working on a new industrial policy which would specifically focus on the MSMEs and technology sectors.
CII President Vikram Kirloskar has said that the newly elected central government would take proactive initiatives which may lead to strong reforms and faster growth. Kirloskar also predicted that growth pace might go up in the current year as there are expectations that rural demand may revive and infrastructure expenditure may continue, the report said.