India FY19 Union Budget - Fostering the recovery

The Union Budget has maintained a good balance between fiscal consolidation and growth stimulation

Feb 2, 2018 | Invesco Asian Investment Team

India’s Union Budget FY19 (2018-19) was presented by Finance Minister Arun Jaitley in Parliament on 1 February 2018. This budget marks the last full-year budget for the Modi government before the general elections in 2019. Various new initiatives and expenditure targets for the upcoming financial year were announced, largely focusing on uplifting the agricultural sector, reviving the rural economy, boosting infrastructure, along with the major push in healthcare reforms in the country.

What we think…

We believe that the Union Budget came in close to our expectations. The government’s focus on strengthening the country’s rural economy and agricultural sectors was well anticipated to improve income and demand in the rural population, which consists of 60-70% of the economy. In addition, we believe that this ‘people-friendly’ budget came in time ahead of the general elections next year, providing good support to the rural recovery and improving the economic cycle in India, after the GST reforms and demonetization effects have slightly held back growth in the recent year.

 

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