Budget 2023: Economists Call On FM Nirmala Sitharaman To Continue With Capex Push, Says Report

In a pre-Budget consultation meeting with Finance Minister Nirmala Sitharaman, economists suggested that the government could target a fiscal deficit of 5.8-6 per cent of nominal GDP for 2023-24

Finance Minister Nirmala Sitharaman has concluded her consultations for the Budget for the next fiscal year.

Economists have asked the government to continue with the capital expenditure (Capex), simplify personal income tax, and focus on achieving high growth rates, as reported by Business Standard. In a pre-Budget consultation meeting with Finance Minister Nirmala Sitharaman, economists recommended that the Centre could target a fiscal deficit of 5.8-6 per cent of nominal GDP for 2023-24.

The report quoted a person aware of the discussions said, "Most economists have suggested that the fiscal deficit be kept between 5.8 per cent and 6 per cent in order to stay on the glide path towards a medium-term target of 4.5 per cent of the GDP. The suggestions were that the central government continue with its Capex push and look to simplify taxes."

In another report, a source told the Financial Express (FE) that for FY24, economists want the Centre to ensure a reasonable amount of fiscal consolidation. They asked the government to continue its asset monetisation, meaningful privatisation initiatives, and reduce the elevated import tariffs. They suggested the government keep up the focus on achieving high growth rates on a sustained basis by continuing to take more reform initiatives amid strong external headwinds.
 
Sitharaman has concluded her consultations for the Budget for the next fiscal year. A statement from the finance ministry said, "More than 110 invitees representing seven stakeholder groups participated in eight meetings (until Monday)." The pre-Budget consultation started on November 21.

On Monday, the economists who attended the meeting included N R Bhanumurthy of Dr BR Ambedkar School of Economics University, Ashwani Mahajan of Swadeshi Jagaran Manch, Poonam Gupta of National Council of Applied Economic Research, Monetary Policy Committee member Ashima Goyal, Karthik Muralidharan, Aditi Nayar of ICRA, Santanu Sengupta of Goldman Sachs, Rahul Bajoria of Barclays, Madan Sabnavis of Bank of Baroda, and Deepak Mishra of ICRIER.

The finance ministry said that the representatives of the stakeholder groups made a number of suggestions for the forthcoming Budget that included a mechanism for green certification to help MSMEs, an urban employment guarantee programme to boost employment generation in urban areas, rationalisation of income tax, creation of innovation clusters, schemes for improving domestic supply chains,  reduction of taxes on the electric vehicle, the introduction of EV policy, the continuation of public CAPEX, fiscal consolidation, and lower customs duties, among others.