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Union Budget 2020 opportunity to unleash reforms: Brickwork
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SME Times News Bureau | 23 Jan, 2020
Brickwork Ratings on Thursday said the Union Budget 2020 is an
opportunity to unleash reforms to restore economic growth and to set a
clear roadmap for achieving the ambitious USD 5 trillion economy target
by 2025.
"BWR expects Union Budget to provide a boost to
investments and savings in the Union Budget 2020-21, to be presented on
February 1, 2020, is expected to announce appropriate measures to
restore economic growth and to set a clear roadmap for achieving the
ambitious USD 5 trillion economy by 2025", it said.
Amidst the
current slowdown in the economy evident from the 11-year low GDP
estimates of 5 per cent, the approach to the economic policy for the
next year needs to be genuine and realistic. The challenges faced by the
economy, particularly on the demand side envisages more measures but
shortfall in revenue so far, (than the targeted budget estimates) comes
as a big hindrance.
Out of certain measures announced recently to
revive the economy, the sharp reduction in corporate tax makes India
one amongst the low corporate tax rate countries. The reduction in tax
rate and lower economic growth impacted government's tax revenue,
Brickwork Ratings stated.
Lower revenue generation restricts
room for huge stimulus, whereas the economy can do with a booster shot.
It looks like the government will adhere to fiscal consolidation path
as it has already curtailed expenditure for the fourth quarter of
2019-20.
The Prime Minister's Office (PMO) has also cautioned the
Ministry to not to set over-ambitious tax and fiscal deficit targets.
Hence the task of the Finance Minister has become more challenging, and
she has to be very careful while making the budget allocations to the
existing schemes as well, it noted.
Most of the industry specific
demands have been addressed by the Finance Minister in her
announcements since August 2019, like recapitalization of banks and
measures to address NBFCs liquidity crisis, auto sector-related
proposals and reduction in corporate tax rates, it observed.
These
measures are expected to have an impact gradually. The amendments made
in IBC law enabling the resolution of finance companies and the Supreme
Court verdict on the resolution of Essar Steel case has been positive in
terms of releasing the locked-up funds in stressed assets. The
government is expected to continue amendments to various laws to provide
ease of doing business. Much of the focus is on what the Budget 2020-21
offers to bring the economy on a growth track quickly to attain the USD
5 trillion economy goal by 2025, it said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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