Indian Economy, Budgetary Reforms needed for 2022-23

In India, the ongoing Covid -19 pandemic has created a prolonged health crisis. Economic activities were slowing down even before the pandemic struck. Two Covid - 19 waves have resulted into a deep and broad based economic downturn having a potential of long lasting impact. The disruption have exposed the country's dependence for the products ranging from raw materials to finished goods for the manufacturing sector. Also, the growing differences with the neighbouring countries during the time of pandemic choked global trade. 

 The authorities have responded to with fiscal policy besides scaled up support to vulnerable groups on selective basis. Despite the pandemic, the authorities have continued to implement structural reforms. Though policy steps helped to reduce the pandemic it is still possible to result in more poverty and inequality.

Accelerated global monetary tightening could trigger capital outflows and disturb credit growth. Covid- 19 has resulted in India to introduce Asset purchasing programs.which RBI is doing by second quarter of 2021. Asset purchase has significant effect on GDP and inflation. It is a way to reduce long term interest rates. Lowering interest rates results into quantitative easing of supply of money in the economy to provide liquidity during time of uncertainty.      

India's economy is up for a rebound after lasting the infections of Covid 19 infections this year which constrained economic activities and took a heavy toll on its people. What happens in India shall have a big impact in the country and the world since it is taking a large part of humanity and the global economy. India needs to continue its implement reforms in main areas of health, land, labor, skill and finance in order to come out stronger from the impact of Covid 19 pandemic.

Govt. should, in order to revive the economy implement measures to contain effects of  Covid 19 and inflation, relief to industry for more production thus providing more jobs, strengthen supply chain streams, enhance social security and retirement benefits to the increasing number of population, Tax reforms in view of declining currency value strength and exports, increase standard deduction limit, Tax incentives to boost savings.

In the healthcare sector, benefits (in cash or kind) to the hospitals be provided. It  needs strict governance since lot of embezzlement of funds are being done especially by private hospitals. They deny/delay treatment to patients in order to earn more money both from Govt. in the name of Covid 19 (for providing social service) and from Patients (towards cost of medicines, tests) and let patients die but their claims from the Govt. remain intact. It is indeed a matter of serious offence which needs to be investigated/audited and shall certainly save good amount of money from its being misused..This will boost public faith and confidence for the Govt.- both in the short as well as long time.

Section 80 C is the most widely used section by the individual investors which consists of large number of tax saving investments which reduces the taxable income burden of taxpayers. Increased provisions in this section shall extend more retirement savings for the individuals which can be used for economic development of the country. It will also reduce the dependence on FIIs and money shall remain in the country itself. 

To conclude, I must say that tax policies, better execution of budgetary allocation, extended social reforms with proper support of digital technology, disinvestment plans shall give boost to Govt.'s borrowing plans with its strong policy support to the priority sectors will certainly give a much needed strong revival economic growth for the country.      

                                                               *****************