“Meeting is to seek views of economists on steps needed in the budget,” said a person privy to the development. Modi has already held preliminary discussions with finance ministry officials on the contours of the upcoming budget that is to be presented on February 1.
This meeting assumes significance as the government gets into top gear to finalise proposals for the budget being presented amid uncertainty on multiple fronts caused by Covid-19 pandemic and the need to sustain the sharp rebound.
India’s economy contracted at a lower 7.5% rate in the July-September quarter after a deep 23.9% in the April-June quarter when much of the country was locked down to contain the coronavirus pandemic.
Finance minister Nirmala Sitharaman has herself said that the upcoming budget would be like no other in the past. “Hundred years of India wouldn’t have seen a budget being made post a pandemic like this,” the minister had said at an event last month.
The government has announced three packages since March after Covid-19 outbreak, but these have been criticised for lacking in providing the much-needed demand stimulus.
The upcoming budget is being keenly watched for measures to sustain demand and strengthen recovery.
Focus is likely to be on ramping up infrastructure including healthcare and lift the country’s manufacturing with emphasis on self-reliance. Many experts have favoured greater fiscal support from the government to sustain demand recovery.
“During all the past crisis, aggregate government spending had ramped up in a counter-cyclical manner, supporting households and demand in the economy. That’s not the case this time,” Edelweiss said in a recent report. “Relative to other countries as well, India’s fiscal response so far has been slow, even though GDP contraction is large.”