Union Budget 2020 India: Fiscal stimulus for rural economy, infusion of more funds into banks, package for stressed non-banking financial companies (NBFCs) and relaxation of the FDI cap in PSU banks are being widely expected from the Finance Minister Nirmala Sitharaman’s upcoming budget. The stimulus must be directed towards boosting the rural economy where the propensity to spend is higher than their urban counterparts, said a recent FICCI economic outlook survey. It also said that the larger allocations to schemes such as MGNREGA, PM-KISAN and direct income transfers (DBT), must be undertaken to alleviate the prolonged distress in the rural sector.

One of the major roadblocks that India has consistently faced is low spending power. To address this, the FICCI survey has also advocated for concessions in the form of tax benefits and incentives for homebuyers, which will provide the much-needed boost for the real estate sector. The real estate sector has been underperforming for a long time. In order to tackle low credit growth, the FICCI survey has an expectation for a distinct, broad base plan to revive the financial sector. Easing of the Foreign Direct Investment FDI cap in the PSU banks has also been zeroed in as one of the primary areas to address in order to revive the economy.

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To boost trade and curb the deficit, the survey has said that the government must enter into bilateral trade agreements with key trading economies where India has good complementarities so that the country can work towards healthier and sustainable trade balance.

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Meanwhile, it has also been suggested that the welfare policies that have not achieved the target efficiently should be reviewed. Amid the prolonged slowdown, the Narendra Modi-led government is set to present the Union Budget 2020 on 1 February 2020, and the industry has been expecting more fiscal measures even after FM Sitharaman announced a slew of measures in recent months to fight the economic woes.