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nion Finance Minister Nirmala Sitharaman will on Friday present the first budget of

the Narendra Modi-led NDA government's second term in office.

Sitharaman takes centrestage at a time when reports have indicated there's been a
sharp slowdown in India's economic growth.

In the last quarter of the 2018-19, GDP growth slipped to its lowest level in five
years or twenty quarters. The situation demands the government to inject the
economy with a new dose of investments, said the Economic Survey of India, which
was tabled in Parliament on Thursday.

However, revving growth is only one of the finance minister's many challenges.
Rising fiscal deficit and slowdown in consumer demand are two other issues that
make her task tougher.

Considering the economic situation, there is hardly any room for manoeuvring with
budgetary allocations, but it should not come as a surprise if the finances
minister decides to take some bold steps - as suggested by the Economic Survey.

Boosting investments, even though it could push up the fiscal deficit, is a move
that has been predicted by experts across sectors. Even the stock market is
expecting a number of reforms from the government.

Meanwhile, there are millions of citizens who have requested Nirmala Sitharaman to
exempt the basic income tax exemption limit while another lot has asked her to look
at increasing tax deductions.

While such a move is unlikely in the present state of the economy, the government
could take a surprise call to increase tax exemption limit to Rs 3 lakh from the
existing Rs 2.50 lakh. It could also increase income tax deduction under Section
80(C) of the Income Tax Act.

Such moves could lead to higher government spending but economists have made it
clear that the government needs to boost economic growth - be it through tax
deductions or higher investments.

Meanwhile, Micro, Small and Medium Enterprises (MSMEs) are likely to be a top focus
in the government's budget for the year. Corporate tax for MSMEs could also see a
drop as the government scrambles to boost economic growth.

Another concern arises over job creation, which was one of the issues discussed in
numerous pre-budgetary meeting held in the run up to July 5.

The unemployment rate, according to a recent government report, has touched a 45-
year high and many have linked slower growth with falling employment.

As the Economic Survey prepared by Chief Economic Adviser KV Subramanian and his
team indicated, the government has to focus on aggressive investments in order to
create more employment.

The survey, tabled in the Lok Sabha on July 4, also