Budget 2012 may see Finance Minister Pranab Mukherjee attempt to nudge entrepreneurs to invest more by unveiling major investor-friendly policies. Will the Finance Minister announce easing of norms governing foreign investment in infrastructure, aviation?
Policymakers have begun talks on raising indirect taxes and withdrawing the last remnants of the 2008 stimulus, as the government comes under fire for not tackling the rising fiscal deficit.
The fiscal stimulus measures had pushed the deficit to a 16-year high of 6.8% in 2009-10. The government managed to bring it down to 4.7% in 2010-11, following the over Rs 1 lakh crore bonanza from 3G and broadband auctions. But the government will miss its 4.6% fiscal deficit target in 2011-12.
After the bounce back from the financial crisis, stubbornly high inflation has landed India in a big problem that has seen growth estimates slip from over 9% at the beginning of the year to near 7% now.
