Budget Expectations: Balance fiscal steps and public spending: CARE to FM

By CARE Research

The Union Budget for 2012-13 (FY13) is to be presented in Parliament on 16th March. This will be a critical Budget as it sets the tone for policy stance relating to not just fiscal issues but also monetary policy and economic reforms. Also, it is being announced at a time when the economy has shown distinct signs of a slowdown and is looking for a boost from the government through appropriate policy announcements. Global as well as the domestic investors would also be looking for signals.
The theme of the FY13 Budget would be on:

• Striking a balance between fiscal consolidation and public spending while maintaining sustainable inclusive growth
• Focusing on growth in rural areas and provision of more education and health facilities through centralized sponsored schemes
• Focusing on increasing infrastructure investment
• Moving towards implementing GST and DTC - Revision of tax slabs, rates and so on

Macro-economic environment: The economic conditions in India during FY12 have been challenging with the development of a sharp trade-off between inflation and growth being the driving factor. Policy formulation has been difficult on account of the persistently high inflation and slowing industrial growth clubbed with sluggish investment climate in the country. Further, volatility in the foreign exchange market has added to the difficulties of the policy markers.
Based on CSO

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