Budget 2020 was disappointing for lacking vision, says Ashima Goyal

The Union Budget was “disappointing” as it lacked a vision, though measures like relaxing the fiscal deficit target and simplifying income tax are positives, the PM’s economic advisory council member Ashima Goyal has said.
 
Goyal, who is a part-time member of the Economic Advisory Council to the Prime Minister (EAC-PM), also said that it was a “surprise” not to have a mention of the word ‘slowdown’ in the nearly three-hour long speech by Finance Minister Nirmala Sitharaman.
 
The Budget document is a “balancing act” between fiscal stimulus to drive growth and the need to be responsible on spending, she said at the Indira Gandhi Institute for Development Research here over the weekend. “Overall it (Budget) was disappointing because they didn't bring out the vision as a first real budget of a new government. It had to give a vision,” she said.

 

India’s GDP growth is expected to slip to a decadal low of 5 per cent this fiscal, pressured by domestic factors like drop in consumption, as well as global issues.
 
She said Sitharaman was in a “catch-22” situation from the word go in the Budget making process, wherein any action would have left someone unhappy. However, the finance minister has achieved a “balancing act” through her moves, Goyal said. She elaborated that by adopting the ‘exit clause’ under the Fiscal Responsibility and Budget Management (FRBM) Act, the government gave a stimulus to growth and yet affirmed commitment to rules against fiscal profligacy.

 
To drive the point further, she said a 0.5 percentage point relaxation in fiscal deficit target offered under the exit clause makes lot of resources available, considering that the overall size of the economy is nearly $3 trillion.
 
Goyal also welcomed the government's resolve not to adopt policies similar to the response following the 2008 financial crisis.