₹10.2 lakh crore in FY25, implying a relatively sedate YoY expansion of about 10 per cent, compared to over 20 per cent expansion seen in each of post-COVID years. The slowdown in capex growth is likely to have some bearing on economic activity and GDP growth." To generate jobs in the rural sector, the government may announce some incentives to increase investment in rural infrastructure and extend the scope of production-linked incentive (PLI) schemes to sectors such as chemicals and services. “One of the ways could be higher spending on building rural infrastructure or providing incentives that improve cash flow...
Broadening the scope of PLI schemes to sectors such as chemicals and services can create demand for more manufacturing," Deloitte said. Despite poll pressure, Sitharaman may opt for a further cut in fiscal deficit to 5.3 per cent of India's gross domestic product (GDP) in the budget. “We see the Centre's fiscal deficit to consolidate further to 5.3 per cent of GDP, despite poll pressure," BofA Securities said in a note.
The government will meet the FY24 commitment to reduce the fiscal deficit to 5.9 per cent, it added. The Union government may allocate higher funds for social sector schemes in the forthcoming interim budget as increased tax buoyancy may provide it with enough funds. According to a PTI report citing sources, collections from income and corporate taxes have been showing buoyancy in the current fiscal year, and the total direct tax mop-up is likely to exceed budget estimates by about ₹1 lakh crore.
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