Union Budget 2020: Nirmala Sitharaman Faces Huge Expectations Against Slowdown

Union Finance Minister, Nirmala Sitharaman faces a serious challenge in presenting Union Budget 2020 on Saturday, against one of the worst slowdowns free India has experienced. The difficult task of reviving the country's economy, with GDP down to its lowest in 11 years, is a tall order. All eyes are on the Finance Minister's balancing act set to unfold in a few hours from now.

Major problems which need fixing:

• Unemployment, stemming from an economic slowdown.

• Inflation

• Fiscal deficit

• Dipping demand, including prolonged slump in auto industry, for instance.

• Lower tax collections (as seen against expectations).

Key things to expect in the Budget:

• Basic income tax exemption may go up (from 2.5 lakh per annum) to boost spending.

• Likely Deductions under Section 80C to spur investments and savings.

• Public spending to kickstart the economy.

• Sitharaman may spell out fiscal steps which would include higher spending in rural areas.

• Higher allocations for infrastructure likely.

• More borrowing from the Reserve Bank of India (RBI) on the anvil.

• The Finance Minister is expected to widen the government's budget deficit target to 3.8% of GDP.

• Tax rebates for home-buyers to boost demand and employment.

• Long-term capital gains tax reforms

• Stimulus package for fast-moving consumer goods companies, coupled with incentives and pricing support.