Budget 2022: ‘Fiscal consolidation should not be emphasized in the budget, the economy still needs support’

SBI economists said in a pre-Budget report, the better way to start the new financial year would be to complete the share sale of LIC in the current financial year. This will be helpful in rectifying the high-pressure books of account.

There should be a provision for gradual steps on fiscal consolidation in the budget

country’s largest bank State Bank of India economists from the government Budget (Budget 2022, I have urged the pandemic-hit economy to continue with stimulus and not focus too much on fiscal consolidation. He says that there is still a need to take more measures to provide stability to the economy to make the revival sustainable. SBI Chief Economist of Soumya Kanti Ghosh said in a pre-Budget report that the best way to start the new financial year is in the current financial year. LIC share sale will have to be completed. This will be helpful in rectifying the high-pressure books of account.

This will help bring down the fiscal deficit to a low of 6.3 per cent in the fiscal year 2022-23, as the new fiscal will begin with a cash surplus of at least Rs 3 lakh crore in the exchequer. He said the budget should not focus on reducing the fiscal deficit beyond 0.3 to 0.4 per cent as most sectors of the economy still need support.

There should be a provision to step on fiscal consolidation in the budget

Ghosh said that there should be a system to take gradual steps on fiscal consolidation in the budget. For the fiscal year 2022-23, the reduction in fiscal deficit should be limited to 0.3 to 0.4 percent as compared to the current financial year.

He also cautioned against the imposition of property tax or other tax at this time, saying that if this happens, it will cause more harm than profit.

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