Budget 2021 Expectations: Banking Sector Holds High Hopes From FM Sitharam To Get Economy Back On The Run

At the time when sectors are struggling with income inequality, job prospects, and overall sentiment, the upcoming Union Budget holds utmost significance in the aftermath of COVID-19 pandemic which stymied economic development 

(Representative Image/ Getty)

New Delhi: The Union Finance Minister Nirmala Sitharaman is set to unveil the awaited Union Budget 2021 on February 1. The upcoming budget is seen as a way forward to get the economy back on track which was adversely hit due to the Covid-19 pandemic in 2020.

The novel Coronavirus which first emerged in the Wuhan city of China in December 2019, took no time to spread across the world affecting millions of lives and economic functions. The pandemic turned into an unprecedented humanitarian and economic crisis.

At the time when sectors are struggling with income inequality, job prospects, and overall sentiment, the upcoming union budget holds utmost significance in the aftermath of COVID-19 pandemic which stymied economic development 

With the government set to unfurl the Budget next month, Banking sector hold high expectations in order to get the stalled and stagnated economy back to the run.

According to a report from YES Bank’s economist department, the upcoming budget is expected to be growth supportive at the forefront at a time when India’s FY21 annual real GDP contraction is expected at 7.7% - lowest growth yet in India’s history.

"Sectors like rural and urban infrastructure, housing, agriculture, domestic manufacturing, hospitality, tourism and aviation are likely to be the key focus areas along with a strong thrust on - MSMEs, start-ups and education. Heath and R&D related spending is expected to see a boost to align India with its global peers," the Yes Bank report states. 

Elaborating on same, the HDFC Managing Director Renu Sud Karnad in a special conversation with ABP News said, the "Union Budget should focus on policies which will lead to economic growth, boost consumption and encourage private investments. The Budget should also lay a strong emphasis on healthcare and livelihood creating sectors such as infrastructure and housing."

Reduction in stamp duties in some states led to significant increase in demand. To keep the momentum going, more states need to provide some incentives to the real estate sector.  For instance, Maharashtra has reduced stamp duty from 5% to 3% till March 31, 2021. This has resulted in a three-time increase in registration volumes for the month of December 2020 compared to the corresponding month in the previous year.

Maharashtra has also reduced premiums charged on construction by 50 per cent till December 31, 2021. This 50 per cent waiver in premium is applicable to both ongoing and new projects. The reduction in premium will help softened prices and improve buyer’s interest, Renu Sud Karnad added.