In the forthcoming General Budget to be presented on February 1, the emphasis can be on saving lives and livelihoods. This is indicated by the Economic Review 2020-21 presented on Friday. According to experts, the finance minister may announce several concessions, including tax cuts, to provide more money on hand, including providing employment to the common man in the budget.
The Economic Survey 2020-21 stated that India had implemented a strict lockdown to prevent the spread of the Kovid-19 epidemic, which it is benefiting from today. One conclusion of the Economic Review 2020-21 is that the country gave more importance to protecting human life than GDP (economic product) during the epidemic. The Economic Review states that with the onset of the epidemic, India had taken measures to prevent its spread, indicating that it was willing to bear the pain of short-term for long-term gains.
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The review document stated that the Indian economy had suffered a major setback due to the global epidemic. But today the country is seeing a correction of the V-shape (sharp correction after rapid decline). Stable macroeconomic situation is stable. It is bolstered by positive signs on exchange rate stability, satisfactory current account position, growth in foreign exchange reserves and manufacturing sector output. The review stated that India paid the price of temporary economic curbs by a temporary fall in gross domestic product (GDP). This shows that India valued human life more than GDP.
Fiscal deficit will exceed target
According to the Economic Review, this time due to the Corona crisis the fiscal deficit will go beyond the previously set target. In the budget for the fiscal year 2020-21, the fiscal deficit was estimated to be 7.96 lakh crore, or 3.5 percent of GDP.
No trust on credit renting
Credit rating agencies are always biased towards giving a good sovereign rating in India. This has also been mentioned in the Economic Review. In this survey, the Chief Economic Advisor said that credit ratings do not look at the basic state of India’s economy. He said that for the first time in history, the Sovereign Rating Agency has given the world’s 5th largest economy a minus BBB rating for investment. This reflects his partisan attitude. The review noted that sovereign credit ratings may affect equity and debt FPI flows in developing countries. This can make the crisis even deeper. Therefore, all the developing countries have been called upon to come together to end this bias related to the sovereign credit rating system and make it more transparent. India has raised the issue of credit rating in the G20.
Can’t beat china with jugaad
The Economic Review clearly states that we cannot beat China with jugaad. We have to increase the budget on our R&D. If we trust Jugaad, then golden opportunity will be missed.
Agriculture handled the country in Corona crisis
According to the Economic Review, the Indian agriculture sector has boosted the Indian economy with a growth rate of 3.4 percent despite the Kovid-19 epidemic. With this it has also been said that now the share of agriculture in GDP will increase to 19.9% while the industry growth rate will be -9.6 percent and service growth rate will be – 8.8 percent.