Arguing that private consumption will take a "significant hit" at least in the next two quarters following demonetisation, Assocham today said the government should jack up its public expenditure in 2016-17.
Budget comes at a time when the public sector banks are facing the problems of non performing assets and the investments have slowed down.
Since coming to power, the NDA government has already increased the service tax rate once. It was increased from 12.36 percent to 14 percent this fiscal year, along with an imposition of Swachh Bharat cess of 0.5 percent on all services from November 15
Madan Sabnavis, Chief Economist, CARE Ratings is not expecting a turnaround in the fourth quarter â€“ there isn't much pickup in consumption, investment or even government expenditure. He says going by the revised fiscal data released by the government on Friday, it does not have much room to increase expenditure either.
Naina Lal Kidwai, country head of HSBC India, tells CNBC-TV18 that the main worrying factor in this Budget is government expenditure.
We should have a comprehensive plan to reduce government expenditure. The way it is ballooning, I am sure that it is not far when it would go out of our hand. We should learn lesson from Greece and other countries.