Global Economy

Budget 2022: Under Omicron shadow

Finance minister Nirmala Sitharaman’s fourth budget may have become a tad more challenging as the country confronts the severe third wave of the Covid-19 pandemic. Economic recovery is expected to face headwinds while there is very little in the government’s arsenal to provide stimulus.

Fiscal deficit is already elevated and cannot be cranked up further – the high inflation and current account deficit make it undesirable as well. How will FM meet the challenge when she presents the budget next month?

A look at the challenges and the options:




How can funds be raised without fiscal profligacy?

  • Pursue aggressive privatisation: There is a good pipeline, a concerted push needed.
  • Asset monetisation can support capex without burdening budget: Clear tax policies to allow for asset monetisation.

Illustrations: ZAHID


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