Union Budget 2021 should focus on putting economy back on track, not on arresting fiscal deficit, says India Ratings
3 years, 10 months ago

Union Budget 2021 should focus on putting economy back on track, not on arresting fiscal deficit, says India Ratings

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Mumbai: The forthcoming Union Budget should focus more on putting the economy back on track and not too much on arresting fiscal deficit, which is seen at 6.2 percent in 2021-22, down from 7 percent this year, according to a report. The Union Budget 2020-21 had estimated fiscal deficit at Rs 7.96 lakh crore or 3.5 percent of GDP, but India Ratings sees it printing in at Rs 13.44 lakh crore or 7 percent if the government cleared its payables and roll over some portion of expenditure to 2021-22. The three factors are: A reduction in the size of the economy from Rs 224.89 lakh crore in FY21 budget to an estimated at Rs 194.82 lakh crore now, which is down 13.4 percent; lower-than-budgeted revenue growth; and higher expenditure to offset adverse impact of the pandemic, it added. Fiscal deficit at end-November 2020 was Rs 10.76 lakh crore as compared to the Budget Estimate of Rs 7.96 lakh crore, which is 135.1 percent of the estimate, it said. Based on the current trend of revenue and capital receipts, 2020-21 revenue receipt is likely to be Rs 16.50 lakh crore and Rs 3.70 lakh crore lower than the estimate.

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