Nirmala Sitharaman is all-set to announce her second Union Budget by the end of this week. With the sinking economic development and GDP, the Budget to be announced takes a crucial role in defining the nation’s path for the upcoming financial year. It can also be considered as an important event for the NDA government as well.
The Finance Ministry is handling the challenge of balancing between a detailed assessment of the economy and the right point to kick-start the economy anew. The Budget must also reassure the disturbed citizens and seize the opportunity to redirect the country towards the right track. The to-be-announced Budget has the power to prove that there is a way for the economy to return to normal.
Though the economy has been suffering, it has not reached a state where it cannot be recovered. The Budget must make it clear to the public that the economy cannot flip overnight and that the government will take all the necessary measures to improve the situation in the upcoming days. Also, covering up the current day situation will be a mistake on the government’s end, if any. Any attempt to cover it up will drop the government’s credibility and worsen the business sentiment.
Also Read: How Will the e-Invoicing System Impact Businesses?
Similarly, the government must acknowledge all the challenges faced by the nation at this point. Taking an optimistic approach towards the problems mentioned can help generate the trust quotient in the minds of the people. This seems necessary if the prime minister has to continue enjoying the electoral populace on social issues as well.
In addition to addressing the significant economic issues, the Budget is also expected to reduce the burden of the middle class. Following the corporate tax rate cuts in October 2019, the expectations regarding rate cuts in the personal income tax regime are high among the public. However, the implications of such a rate-cut expectation are almost ignored by the citizens. It is in the hands of the finance minister to strike a balance between the tax collection targets and accepting rate cuts as per the public expectation.
The Finance Ministry is handling the tough task of raising the economy as well as satisfying the citizens. We will have to wait for a few more days to know how well Nirmala Sitharaman has put her skills into action. It can be considered as an opportunity to answer the critics as well as to uplift the country’s economic situation.
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
