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Budget 2020: Can govt balance reforms with fiscal prudence?

Feb 01, 2020 08:18 IST

As the economy battles a slowdown, all eyes are on Finance Minister Nirmala Sitharaman as she presents the Union Budget. The budget is PM Modi's second opportunity in seven months to refresh policy priorities to support an economy that is on a downward spiral. Finance Minister Nirmala Sitharaman is expected to outline fiscal steps that may include higher spending in rural areas and possible tax cuts. The biggest challenge for the government however, will be to boost growth and consumption amid tight fiscal conditions. As suggested by the Economic Survey, the govt may need to relax fiscal deficit target in FY20 to revive growth. Investors and taxpayers are pinning their hopes on some relaxation in personal tax and tweaks in the Long-Term Capital Gains (LTCG) and the Dividend Distribution Tax (DDT). The government is also expected to push rural demand by increasing allocation to various schemes, along with more policy measures to achieve its target of doubling farmer income by 2022.

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