India Budget Sets Out Road Map for Recovery After Virus Shock

India Budget Sets Out Road Map for Recovery After Virus Shock

February 1, 2021

In this article

India unveiled a new budget stressing a commitment to self-reliance as it seeks to revive growth from an unprecedented recession due to the coronavirus outbreak.

“The government is fully prepared to support and facilitate the economy’s reset,” Finance Minister Nirmala Sitharaman said Monday in Parliament as she presented the annual budget.

Benchmark stocks were trading up 1.3% at 11 a.m. in Mumbai, when she started speaking, set to snap six days of losses.

The federal spending plan, officially known as the Union Budget, is among India’s most highly anticipated and closely watched annual events, more so this year as Prime Minister Narendra Modi’s government seeks to recover from the country’s deepest-ever recession amid one of the world’s worst coronavirus outbreaks.

Presented every Feb. 1, it sets the agenda on a wide range of issues including taxes and bank stability to defense and farming, with ramifications across India’s 1.3 billion people, fromday laborers to billionaires.

The new budget, for the fiscal year starting April 1, also comes as the nation’s financial sector faces increasing pressure from agrowing pile of bad loans, escalatingborder tensions with China and widespreadanger from farmers, whose protests against market reforms overwhelmed parts of the capital New Delhi last week.

Read more:
  • Five Key Numbers Investors Must Watch in India’s Budget
  • India Bonds Face Pivotal Week Ahead of Budget, RBI Meeting
  • Past Failures on Spending Targets Dampen India’s Budget Hopes

Sitharaman had pledged before Monday that the government would look beyond fiscal deficits in its aim to revive Asia’s third-largest economy, which is expected tooutpace the global recovery.

The government’s annual economic report card, released Friday, forecast an11% rebound in the coming fiscal, following an estimated 7.7% contraction in the current year. TheReserve Bank of India will make its next rate decision this Friday. The central bank has paused rate cuts since the middle of last year due to sticky inflation, which has recently shown signs of easing, opening the door for further stimulus.

— With assistance by Ronojoy Mazumdar

Source: Read Full Article