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Budget 2021:┬аFinance Minister Nirmala Sitharaman has promised that Budget 2021, due to be presented on Monday, February 1, will be a ‘never before like’ budget in the backdrop of the COVID-19 pandemic. The ailing economy requires handholding by the government which has raised the stakes higher for┬аthe upcoming budget.┬аDue to social distancing measures and COVID-induced lockdowns, several sectors of the economy were under stress┬аand the country’s gross domestic product┬а(GDP) contracted by 23.9 per cent┬аin the first quarter of the financial year. Moreover, the COVID-19 pandemic┬аhit the country at a┬аtime when the economy was already afflicted with the┬аgrowth slowdown. The GDP growth had touched an 11-year low of 4.2 per cent in 2019-20. (Also Read:┬аBudget Documents Explained: What To Find In Key Budget Components┬а)
Considering all these factors, along with the financial stress on various economic sectors caused due to the pandemic, the government has some major issues to address in Budget 2021. According to economists, the 11 per cent growth rate predicted by the economic survey 2021 paints an optimistic picture for the economy in the next fiscal year. Here are some key of the challenges faced by the Ministry of Finance ahead of Budget 2021:
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