The budget for 2020-21, to be submitted on February 1, is expected to be tense with the expected second wave of structural reforms to pull the economy out of the 4.5 per cent growth over six years.
In addition to the secretary of expenditure, the position of joint secretary (budget), one of the most important officials in the entire budget process, is also vacant for almost three months.
The post of expenditure secretary fell vacant following the appointment of G C Murmu as the first lieutenant governor of the newly formed Union Territory of Jammu and Kashmir. Murmu resigned as Secretary of Expenditure on October 29, and then the additional fee to the Ministry of Expenditure was given to Atanu Chakraborty.
Chakraborty, an IAS officer for 1
After more than a year in the Department of Investment and Public Asset Management (DIPAM), Chakraborty was appointed Finance Secretary in July this year in a major bureaucratic transition.
The Ministry of Finance started the exercise to prepare the annual budget for 2020-21 from October 14 with pre-Budget / RE (Revised Estimate) meetings. The series of meetings with various departments and ministries ended last month.
The budget estimates for 2020-21 are currently finalized after the Expenditure Secretary has completed discussions with other secretaries and financial advisers.
The second budget of Finance Minister Nirmala Sitharaman is considered to be crucial as it will come on the back of a downturn in the economy.
In its monetary policy, the Reserve Bank downgraded its growth forecast for 2019-20 to 5 per cent last week from the previous estimate of 6.1 per cent.
To beat the decline, the finance minister has said that reforms to boost the economy would continue and also hinted to hone personal income tax rates in the upcoming budget.
The Government is investigating the direct tax code (DTC) on personal income tax. It considers the rationalization of the personal income tax rate to increase consumption.
Following the reduction in corporate tax in September, there has been a growing demand for a slant in the personal income tax for buttress consumption.
In the biggest reduction of 28 years, the government in September lowered corporate tax rates by up to 10 percentage points as it looked to pull the economy out of a six-year low growth with a tax break of Rs 1.45 lakh crore.
Basic corporate income tax for existing companies has been reduced to 22 percent from 30 percent and to 15 percent from 25 percent for new industrial enterprises incorporated after October 1, 2019, and started business before March 31, 2023. DP ANZ MR