Union Budget 2022: Financial Sector May Continue To Witness Reforms

Finance Minister Nirmala Sitharaman presented the Economic Survey to parliament today. According to the study, GDP growth for 2022-23 is expected to be between 8 and 8.5 percent, down from 9.25 percent in FY22. Ms. Madhavi Arora, Lead Economist at Emkay Global Financial Services, stated as a result of the same that "The Eco survey laid out the background for the budget to be released tomorrow. It reckons that the upcoming budget faces acute policy trade-offs between nurturing a nascent growth recovery and diminishing fiscal space with challenging debt dynamics."

She further added that the "Policymakers should ensure the fiscal impulse is maximized to improve potential growth while signaling adherence to medium-term fiscal sustainability. This entails continued financial sector reforms, better resource allocation, and funding by aggressive asset sales via functional infrastructure monetization, divestment/strategic sales."

According to her reaction "The eco survey sees India's GDP to grow 8-8.5% in FY23 after 9.25 in FY22, led by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. However, the baseline assumption is stable global financial markets with orderly G-4 policy normalisation and well-behaved oil market (US$70-$75/bbl), and easing global supply chain disruptions."