Union Budget Preview - Two Steps Forward, One Step Back: Anand Rathi
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Anand Rathi Report
Despite the smart bounce back from the pandemic -induced low, the Indian economy remains fragile and growth, volatile. Due to global inflationary concerns, fiscal would be the main policy tool to foster growth.
With better-than-anticipated revenue receipts, especially customs and direct taxes, and relatively contained spending so far, there is elbow room to maintain large fiscal accommodation. Yet, with a longer - term vision, we expect the start of fiscal consolidation in this budget. The fiscal deficit target is likely to be around 5% in FY23, down from 9.4% in FY21.
At the same time, both economic reality and political exigencies may nudge the government to roll out more supportive schemes for agriculture, the rural economy, micro, small and medium enterprises and social sectors.
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