Budget 2020: Major Challenges Before Finance Minister Nirmala Sitharaman

Budget 2020: Major Challenges Before Finance Minister Nirmala Sitharaman

The government will unveil its "plan of action" to boost the economy in the Union Budget to be presented on February 1. The Budget Session of Parliament will commence on January 31 and subject to the exigencies of government business, which is likely to conclude on April 3 with a recess in between. Finance minister Nirmala Sitharaman will present her first full-time budget. As the first female full-time finance minister of India, she needs to address multiple economic challenges. Here’s a look at the five biggest challenges the new FM faces.  (Image Credit: PTI)

Budget 2020: Major Challenges Before Finance Minister Nirmala Sitharaman

Economic slowdown:

Gross Domestic Product (GDP) is expected to grow at 5 per cent in Financial Year 2020 and consumer spending has fallen for the first time in four decades. Apart from this, India's Investment, which used to be above 35 per cent in 2014, has reduced to 29.7 per cent. These are some of the major challenges that the Indian Economy is facing and Nirmala Sitharaman will have to address these issues in her Budget.

Budget 2020: Major Challenges Before Finance Minister Nirmala Sitharaman

Consumption slowdown:

The consumption has slowed down and the story started earlier this year after various automobile and fast-moving consumer goods (FMCG) showed a dip. Auto sales for the month of May declined 21 per cent. Market research firm Nielsen has lowered its growth projection for India’s FMCG to 11-12 per cent in 2019 from 14 per cent in 2018.

Budget 2020: Major Challenges Before Finance Minister Nirmala Sitharaman

Agrarian Crisis:

Agricultural sector – which constitutes of fishing, Agriculture and forestry - stood at 21 per cent of the GDP in 2004-05. But it has dropped significantly to 16 per cent in 2019-20. Despite some measures like the implementation of the new MSP regime, farmers are being benefitted.

Budget 2020: Major Challenges Before Finance Minister Nirmala Sitharaman

Stagnant Investments:

Investment has declined and this is one of the reasons why economic growth has remained low.  From mining to real estate, all sectors have seen a significant downfall. India needs to improve investment to propel the overall economy.