The union budget 2018 will be presented by finance minister Arun Jaitley on February 1. The union budget 2018 holds utmost importance as this will be last full-fledged budget ahead of the 2019 Lok Sabha elections. On Monday, Modi government seemed extremely enthusiastic about the upcoming fiscal year as the economic survey 2018, which was tabled in parliament by Arun Jaitley, held India’s GDP growth at 7-7.5%. The Economic Survey 2017-18 has been authored by Chief Economic Adviser Arvind Subramanian. Following the major announcement of the Economic Survey, the wait for the union budget 2018 is not far as it will be presented in just two days. The documents related to the budget will be listed on indiabudget.nic.in on February 1. However, there are multiple challenges ahead of the union budget for the Modi government, some of them are listed below.
Overcoming Demonetisation, GST impact and the GDP growth: Ahead of the Budget 2018, the economic survey 2018 listed government’s advance GDP at 6.75% for the current fiscal year. This happens to the be lowest growth rate during the Modi government. However, despite the global slowdown, FICCI says, that India managed to exhibit resilience. Another challenge for the Union Budget 2018 is that it comes at an additional cost of the fiscal stimulus plan for road infrastructure and bank recapitalisation announced recently.
Other than these challenges, there are other aspects that the Modi government will tackle head-on. How the government will boost private investment is one of the biggest challenges. Another challenge for the government is to generate employment and also to address rural distress.
As per the economic survey 2018, India can be rated as among the best performing economies in the world as the average growth during last three years is around 4 percentage points higher than global growth and nearly 3 percentage points higher than that of emerging markets and developing economies. So, Indian economy will have enough resources to take up these challenges.
Some of the key challenges in the last year’s union budget were the intention to increase policy rates. The budget 2017 challenges are listed on indiabuget.nic.in. It also mentioned about the uncertainty around commodity prices, especially that of crude oil which has implications for the fiscal situation of emerging economies.