The Union Budget for 2019-20 aimed at striking an optimal balance between fiscal discipline and economic growth in a challenging environment amidst notable deceleration in GDP growth since the second half of 2018-19, according to a latest research paper from the Reserve Bank Of India (RBI). Given the expenditure priorities for boosting physical and social infrastructure and stimulating investment activity in the economy, the Budget aims at mobilising higher resources through non-tax revenues and disinvestment, with direct taxes expected to remain more buoyant, as in 2018-19, noted the paper titled “Union Budget 2019-20: An Assessment” from Kaushiki Singh, Saksham Sood, Kirti Gupta and Neeraj Kumar under the guidance of Samir Ranjan Behera of the Department of Economic and Policy Research, Reserve Bank of India.
The Union Budget for 2019-20 has focussed on building physical infrastructure, improving social services, digitisingthe economy, promoting MSMEs and start-ups, encouraging research and development and making India healthy, green and clean. The financial sector reforms announced in Union Budget along with recapitalisation of public sector banks (PSBs) will facilitate overall credit growth in the economy. The investment and infrastructure push given in the budget is a welcome move to boost growth and employment. A slew of measures announced recently in August 2019 with a special focus on financial sector reforms, auto and infrastructure along with measures related to taxation should also facilitate in strengthening the growth momentum of the economy. The government has demonstrated commitment to fiscal consolidation in 2019-20 as per the FRBM glide path, notwithstanding a challenging domestic and global environment impacting the outlook for growth.
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