Budget 2021: Finance 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 the upcoming budget. Due to social distancing measures and COVID-induced lockdowns, several sectors of the economy were under stress and the country’s gross domestic product (GDP) contracted by 23.9 per cent in the first quarter of the financial year. Moreover, the COVID-19 pandemic hit the country at a time when the economy was already afflicted with the growth slowdown. The GDP growth had touched an 11-year low of 4.2 per cent in 2019-20.
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: