Reportedly the narendra modi government is likely to increase state spending on infrastructure and offer some income tax incentives when nirmala sitharaman reads her Budget 2020 speech in parliament at 11am, aiming to get growth back up from its lowest in a decade. Meanwhile in its Economic survey 2020 released on friday, the Union government predicted that the economic growth would pick up to 6.0% to 6.5% in the fiscal year beginning april 1, but warned that it may have to exceed its deficit target to revive growth.

 

Furthermore india, Asia's third largest economy, is facing strong headwinds with a contraction in investments and manufacturing, and growth for the september ended quarter coming in at 4.5 percent, the lowest in six years. india needs to create jobs for the 1.2 million new entrants to the labour market every month but unemployment levels have hit a four decade high. Meanwhile nirmala sitharaman, who will present her second full year annual Budget in parliament, could defer the earlier target of cutting the deficit to 3% of gross domestic product in 2020-21 by at least two years, government sources told Reuters. 

 

Apparently this will be on top of roughly $28 billion of spending from off-budget borrowings, as the government seeks to keep the deficit in check. Moreover the narendra modi government is expected to announce plans to spend over Rs 102 trillion on roads, ports, airports, irrigation and other infrastructure over the next five years.

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