A report by Dan & Bradstreet states that the forthcoming Union Budget in February is unlikely to introduce any harsh measures amidst increased economic uncertainty and also when the country is going through different challenges after the demonetisation move.
The report also states that, there is an upside risk of additional contagion from developed economies slowing down and the economy of India may also face challenges from demonetisation mostly in the rural segment. Some of the other challenges mentioned include: downturn in domestic growth pace and firming-up of worldwide commodity prices.
The Union Budget will be presented on 1st February, 2017.
Dan & Bradstreet India Lead Economist, Arun Singh stated that there is a lot of anticipation regarding the initiatives to be undertaken by the government in order to revive demand as well as investments in its search to create jobs and accelerate growth. He also added that, as there is already a lot of uncertainties in the economy, the budget will likely not include any harsh measures which further deteriorate the confidence of India Inc.
Apart from demonetisation, some of the other factors of concern for India are poor investment activity, weak industrial production, rupee depreciation, FII outflows, deteriorating bank credit and rising non-performing assets.
Singh also said that, the rupee will remain under pressure following the upcoming state elections and pressure of US protectionist agenda.