NEW DELHI: The Budget is expected to provide support through different measures to restore consumer confidence, which was severely harmed by waves of the Covid-19 outbreak, and to sustain the growth recovery.
In a research, Brickwork Ratings stated that it will also have to send clear policy signals in order to accelerate economic recovery. Various downside concerns, such as fresh Covid-19 outbreaks, rising commodity costs, rising inflationary expectations, continuing supply constraints, and a less-than-favorable global recovery amid decreasing fiscal and monetary policy assistance, cloud the growth picture for the coming fiscal year.
Preparing the budget in such an environment, when various sectors of the economy are still performing below capacity, is by no means a simple process, according to the research.
The pandemic's influence on economic activity persisted in FY22, with the appearance of new Covid strains impeding the recovery process. Following a 7.3percent decrease in GDP in FY21, the economy was expected to grow by double digits in FY22. According to last year's economic report, GDP growth for FY22 is expected to be 11percent. However, economic momentum in some contact-intensive sectors of the economy was stifled as a result of repeated limitations in the aftermath of the new Covid mutations and the second wave of the pandemic.
The advance estimate of GDP for FY22 indicates that the economic recovery is still in its early stages. Because the impact of the sharp rise in cases, as well as the effect of shortages in critical inputs and increases in input costs, the anticipated GDP growth for FY22 in constant prices of 9.2 percent appears optimistic.
Budget 2022: Expected infrastructure for new industries, industrial status
Budget session of Parliament to begin from Jan 31, Budget to be presented on this day
Nasscom Report: Indian startups raised record USD 24.1-bn in 2021