SBI Report Suggests Key Changes for India's Upcoming Budget
SBI Report Suggests Key Changes for India's Upcoming Budget
As the central government prepares for the upcoming budget on July 23rd, a research report by the State Bank of India (SBI) highlights crucial areas that need attention to drive sustainable economic growth and development in the country.
Fiscal Prudence and Tax Reforms
The report emphasizes adherence to fiscal prudence while continuing on the path of fiscal consolidation, suggesting a fiscal deficit target of around 4.9%. It advocates aligning personal income tax rates with corporate taxes and gradually transitioning all payers to the New Tax Regime. Additionally, it recommends considering tax parity for bank deposits to attract more savings and boost household financial savings.
Agriculture Sector
For the agriculture sector, the report highlights the need to address issues like financing, livelihood support, and the Agri Credit Guarantee Trust Fund. It suggests exploring alternatives to the current Minimum Support Price (MSP) policies, which reduce trade and export competitiveness.
Banking Sector Reforms
The report calls for continued reforms in the banking sector, including the divestment of public sector banks (PSBs) and the stake sale in IDBI Bank. It also recommends changes to the Insolvency and Bankruptcy Code and the promotion of Production Linked Incentive (PLI) schemes for MSMEs to reduce import dependency.
Mineral Strategy
The report suggests developing a comprehensive mineral strategy, especially for critical minerals, to ensure mass employment and secure the supply chain from exploration to recycling.
By incorporating these suggestions into the upcoming budget, the government can lay a strong foundation for sustainable growth, promote financial inclusion, and drive economic resilience in the post-pandemic era.
Doubts Revealed
SBI
SBI stands for State Bank of India. It is the largest bank in India and is owned by the government.
fiscal deficit
A fiscal deficit happens when a government spends more money than it earns. It is like when you spend more pocket money than you get from your parents.
personal income tax
Personal income tax is the money people pay to the government from their earnings. It helps the government run the country.
corporate taxes
Corporate taxes are the money that companies pay to the government from their profits. It is similar to personal income tax but for businesses.
agriculture sector
The agriculture sector includes all the activities related to farming, like growing crops and raising animals. It is very important for India because many people work in farming.
banking sector
The banking sector includes all the banks and financial institutions that help people save money, get loans, and manage their finances.
Insolvency and Bankruptcy Code
The Insolvency and Bankruptcy Code is a set of rules in India that helps companies and people who cannot pay their debts. It helps them either pay back the money or close down in an orderly way.
Production Linked Incentive schemes
Production Linked Incentive schemes are programs by the government to encourage companies to produce more goods in India. They get rewards or incentives for making more products.
MSMEs
MSMEs stand for Micro, Small, and Medium Enterprises. These are small businesses that are very important for the economy because they create jobs and help in economic growth.
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