Union Budget 2018: On February 1, Finance Minister Arun Jaitley will present the Union Budget 2018 in the parliament. In the budget 2018, the speculation is that there will be multiple steps taken to boost the investments in the country.
Union Budget 2018: On February 1, Finance Minister Arun Jaitley will present the Union Budget 2018 in the parliament. In the budget 2018, the speculation is that there will be multiple steps taken to boost the investments in the country. A boost to the job creation can be seen in budget 2018 as well. The economic survey 2018 held the country’s real GDP growth to be 6.75% this fiscal year and it will rise to 7.0 to 7.5% in 2018-19. It should be noted that the economy has overcome the lull caused by the Goods and Services Tax, or GST. As mentioned in the economic survey 2018, the government focused on promoting employment, agriculture and education. Since the highlight of the economic survey 2018 was on three major pillars, push in other sectors can be seen such as infrastructure which needs large amounts of investments.
The finance ministry has faced a lot of anger due to back to back major economic reforms. Ahead of the Union Budget 2018, corporate America has urged Finance Minister Arun Jaitley for further reduction in tax uncertainty for multinational companies and institutional investors. US—India Business Council (USIBC) president Nisha Desai Biswal said: “A significant positive step toward improving the investment climate would be to further reduce tax uncertainty for multinational companies and institutional investors in India.”
Also, there are two more key issues that FM Arun Jaitley must address to boost investment and growth in the country. They are: Non-tax revenues from land bank monetisation of public institutions and full tax-exempt status for income from debt instruments issued by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in India.
“Infrastructure investments will continue to get focus. Rural economic revival via farmer support as well as investments in the Rural areas will also be a key focus. The government has got flak on employment generation and as such this will be another area where we could see some policy focus. Overall, with GST now in place, the focus will be on economic revival,” Sandip Sabharwal of asksandipsabharwal.com told FE Online in an interview.
The boost in infrastructure projects like BharatMala has shown government’s flow of investments moving towards infrastructure projects.
The Economic Survey tabled in Parliament studied the pattern of investment and saving slowdowns as well as recoveries in order to obtain policy lessons for India. One finding in the survey is that investment slowdowns have an impact on growth but not necessarily saving. Another is that recoveries from investment slowdowns, especially those associated with balance sheet difficulties–as in India–tend to be slow. Notably, mean reversion or some degree of automatic bounce-back is absent so that the deeper the slowdown, the slower and shallower the recovery. The policy conclusion is urgent prioritization of investment revival to arrest more lasting growth impacts, as the government has done with plans for resolution of bad debts and recapitalization of public sector banks.