Budget set to focus on long-term economic policy vision: Report

NEW DELHI: Govt will use the Budget as an opportunity to make a big picture statement about the long-term economic policy vision over the next several years, rather than minor stimulus announcements, Goldman Sachs economists said in a report on Monday.
"We think this Budget will go beyond just fiscal numbers, and likely make an overarching statement about long-term economic policy of govt towards 2047 (100 years of Indian independence)," the report said.
"We see an emphasis on job creation through labour-intensive manufacturing, credit for MSMEs, continued focus on services exports by expanding GCCs, and a thrust on domestic food supply chain and inventory management to control price volatility. The Budget is also likely to lay out a path for the future of public finance in India, entailing: a roadmap for public debt sustainability, and b) green finance: the role of public finance in balancing India's energy security Vs transition needs," according to the report titled 'India's Fiscal policy: Union Budget preview: Beyond the numbers'.
The economists said they expect the general govt to stick to the announced fiscal deficit target of 5.1% of GDP for FY25 (or even slightly lower) and announce further consolidation to a deficit of below 4.5% of GDP by FY26. "Even if we see some expenditure allocation towards welfare spending, it may not require a reduction in capex given the higher than expected dividend transfer from the RBI," said the report.