New Delhi | Abhinav Gupta: The announcement of Union Budget 2021 by Finance Minister Nirmala Sitharaman is just around the corner and hopes are high for some big announcements across sectors. The government is facing a double-challenge of pulling the economy out of COVID-19 pandemic’s deep abyss and also make sure that the crisis-hit sectors get the much-needed upthrust.

While the middle class is expecting tax sops, the industrial and other sectors are seeking fund boost to come out of the pandemic crisis.

In an exclusive interaction with Jagran, Mahindra Group Chief Economist Sachchidanand Shukla suggested the steps the government may consider taking to help the economy get the requisite boost.

Mr Shukla suggested steps the government could take to pull the economy from a “once in a century” kind of situation. He said that the focus should be on capital expenditure by the government.

"The finance minister has herself said that this will be a “once in a 100 year” kind of Budget because this pandemic is also “once in a century” situation, which has hit the global economy to a great extent. This is why people are expecting a lot from this Budget and the first thing we would want to see is whether this will the government’s intent to take the economy from survival to revival.

"If revival is what the government is aiming, then there a few things we would want to see. The first thing we expect is that the expenditure or fiscal support is greater, i.e. the expenditure to GDP ratio should be bigger this time. The expenditure from the government should be bigger which can be in two ways - first is revenue expenditure and second is capital expenditure. We expect the government focus more on capital expenditure," said Mr Shukla.

He also suggested that the expenditure by the government should be around 70-75 per cent in the first half of the fiscal, than the usual 50-53 per cent, and it should be targeted on sectors which require more efforts, like aviation and hospitality, to come out the aftermath of the crisis.

Suggesting measures to bring relief to the common man, Mr Shukla expects the government removes certain surcharges and cesses which add up the income tax paid by the individuals. He, however, ruled out the possibility of any major announcement in the income tax slabs this time. 

He also said that expediting infrastructural projects in the pipeline will lead to job creation, which has become a big issue for the government in the wake of the thousands losing employment due to the pandemic and lockdown.

Mr Shukla also suggested ways to cut the rising fuel prices and how to boost the industry and service sector. He also said that the government should focus on the agriculture sector to rebuild the economy.

Watch the full interview here:

Posted By: Abhinav Gupta