BUDGET EXPECTATIONS: MARKETS

17 Jan 2023 , 08:28 AM

The expectations from the budget are mainly focused on growth, maintaining the fiscal deficit target and keeping inflation in check. One of the key growth inducers for the next year would be public investments and fiscal consolidation, going hand in hand.

There are expectations of the fiscal deficit target of 6.4% of GDP to not only be met but to lower the next year target owing to the ample GST collection. Market expectations are of a fiscal target of less than 6%, this will help in accelerating growth and aid the central government in some fiscal pressure. What the markets don’t want to witness would be unpleasant surprises on the tax front, especially as there are a host of other things for investors to worry about. Along with the manufacturing sector, I believe that there can be positive policies and support to the service sector which can help further boost the economy. PLI scheme expectations in the private sector to further improve employment can be considered along with an additional focus towards allocation in the defence sector and capital-intensive sectors. Focus on rural economy and policies around the same can also be expected along with subsidies.