Union Budget 2022: Economy Needs Support, Levying Property Tax Will Result In More Losses: SBI Report

In its pre-Budget report yesterday, SBI said that the Budget should not focus on reducing the fiscal deficit by more than 0.4 per cent

SBI in its pre-Budget report said more measures should be taken for continued revival and to stabilise the economy. File Image

Budget 2022: Economists at the State Bank of India, the country's largest bank, have urged the government to continue boosting the pandemic-hit economy and not give too much emphasis to fiscal strength in the Budget. They say more measures should be taken for continued revival and to stabilise the economy.

Pre-budget report of SBI submitted on Wednesday
State Bank of India (SBI) Chief Economist Soumya Kanti Ghosh said in a pre-Budget report on Wednesday that the better way to start the new fiscal year would be to complete LIC's IPO in the current fiscal year. This will be instrumental in correcting substantially over stretched balance sheet. This would also help bring the fiscal deficit to a low of 6.3 per cent in FY22-23, as the new fiscal year will begin with a cash surplus of at least Rs 3 lakh crore in the government treasury.

There should not be an emphasis on reducing the fiscal deficit by more than 0.4 per cent
Soumya Kanti Ghosh said the Budget should not focus on the fiscal deficit reduction by more than 0.3 to 0.4 per cent as most sectors of the economy still need support. Ghosh said that a provision should be made in the Union Budget on taking gradual steps on fiscal consolidation. The reduction in fiscal deficit for FY22-23 should be limited to 0.3 to 0.4 per cent as compared to the current financial year.

Caution against levying property tax or other taxes
Ghosh also alerted against levying property tax or other taxes at this time saying that if it happens, it will lead to more losses than profits.