Government Should Have Rs 2 Lakh Crore More To Spend In FY22: JPMorgan’s Sanjay Mookim
India may have around Rs 2 lakh crore more to spend in the next fiscal compared to 2020-21 as economic rebound leads to tax buoyancy and better collections, according to JPMorgan’s Sanjay Mookim.
The government, he said, will have to choose how to spend this money, whether it is in paying off its dues or to earmark for infrastructure spends. ”It’s going to be an interesting budget to watch because for the first time in many years the government actually has choices to make,” the head of research told BloombergQuint’s Niraj Shah in an interview.
The big “delta” or variable to this estimated number will be the oil prices, Mookim said. One of the big oil-importing countries, India saw its demand for fuel fall 70% during the lockdown. Similar restrictions across the globe led to weak commodity prices, which are now rising as economies reopen. Retail petrol and diesel prices have reached new heights this January.
Mookim said the current financial year is likely to end with a fiscal deficit of 6.5-7% of GDP, while the target for next year may surpass 3.5%.
About the upcoming budget from an equity investor’s point of view, he said the market loves more expenditure. “A commitment to say that look the country will continue to build more expressways and metros would be good because it creates jobs and has a multiplier effect,” he said.
Watch the full conversation here: