It’s that time of the year during which the pink papers and business channels have started their pre-budget articles and programming. Most years, the budget is simply a non-event. With minor tweaks, it barely justifies the coverage it receives in the media. However, this year’s budget is crucial for the below reasons.
- Poor GDP Growth. The most recent government estimates for GDP growth for FY 2019-20 has come in at 5%. This is the lowest in a decade.
- Global Uncertainties. First, it was the U.S. & China trade war. Now the escalation of tensions between the U.S. & Iran. Add to that the unrest in Hong Kong and Brexit, 2020 is already turning out to be a tumultuous year. Given the fragile situation of the Indian economy, the government will have to take many more steps to soften the blow that the economy is likely to face from various geopolitical issues.
- Unrest over the C.A.A. The protests over the Citizenship Amendment Act refuse to die down and have taken over the national agenda. With investors around the world watching, the government will want to change the narrative to economic development sooner rather than later.
The expectations are high from the 2020 budget. Given the positive actions from the Modi government over the last few months, It has the potential to be an economic blueprint for the decade to come and set the economy on a path of 8% GDP growth.