Budget 2022 is not expected to be a blockbuster, this is not a testament of the performance or the effort on behalf of North Block but more a reality check on measures already taken and big ticket events that are lined up. From global rate hikes to variants galore, EJ Biz lists out why Finance Minister, Nirmala Sitharaman may need to wait and watch and not bell the cat of economic recovery via just the budget.
First up the impending Federal Reserve rate hike. After a months of easy money to ease the pain of the pandemic the US central bank is set to hike rates this year marking the end of the flood of liquidity. This would lead to a domino effect on stock markets and also global central banks. The FM would have to be in a wait and watch mode to see what the Fed will roll out.
Second the rising expense list. The govt's expenditure plan has been tossed on it's head due to Covid-19 and the fiscal deficit is already slated to be as high as 6.8% for the current fiscal year ending March 31. This despite buoyant tax collections gives little room for any big bang announcements from North Block.
Third time is a charm? Faced with a third wave of Covid with new variants popping up in global news economic planning will have to take the lead from developments from the pandemic that has taken control of global budgets since March 2020.