Budget should navigate economy against global challenges

Directionally, it should also take forward the reforms process to unlock India's latent growth potential.

- CHANDRAJIT BANERJEE

With less than a week to go, the last full Budget of the government has entered the last mile. Budget 2023-24 comes at a time when the global economic environment continues to be troubled. The confluence of global headwinds is triggering fears of an imminent global recession. With US, European Union, and China slowing down simultaneously, it is expected that global growth would slow to 3.2 per cent in 2022 and is pegged at 2.7 per cent in 2023.

Nevertheless, India with 7% GDP growth rate estimated for 2022-23, represents a beacon of hope in an otherwise bleak global economy. However, while Indian economy has done well relative to most economies, it is not immune to global slowdown and uncertainties. Hence, the budget must focus on strengthening India's macro-economic stability as well as continue to provide support to recovery. Directionally it should also take forward the reforms process to unlock India's latent growth potential.

Fiscal consolidation is imperative for macro-economic stability. The Budget should lay down the fiscal consolidation roadmap and adhere to the target of 6.4 % of GDP for this fiscal and bring it down to 6.0% of GDP in FY24 and 4.5% by FY26.This would be done through revenue mobilization and expenditure control.