Friday, 16 April, 2021

India's Bigger Budget is a Shot in the Arm for Economy: S&P

Budget 2021 Numbers more credible achievable than previous years says India Ratings Fitch, S&P Flag Indias High Fiscal Deficit, Slow Consolidation
Deanna Wagner | 03 February, 2021, 23:20

"Fiscal deficit has been pegged at 9.5% of the GDP", Sitharaman said during her address in Parliament.

The contribution of lower receipt to this increased fiscal deficit was 16.5 percent and higher expenditure was 83.5 percent and that any improvement in fiscal deficit of FY22 should come mainly from receipts side.

The government would need another 80,000 crore Indian Rupees for which it would approach the market in the next few days.

Presenting the first-ever digital Union Budget, Nirmala Sitharaman said that India's fight against COVID-19 continues into 2021 and that this moment in history, when the political, economic, and strategic relations in the post-COVID world are changing, is the dawn of a new era - one in which India is well-poised to truly be the land of promise and hope.

In RE 2020-21, the government has estimated to pre-pay around Rs 1.5 lakh crore of outstanding food subsidy related loans of the Food Corporation of India.

India Ratings on Monday said the Budget numbers are more credible and achievable than in the past many years, and the government may even exceed the revenue targets if the current tax buoyancy level is maintained.

Children encouraged to 'express their feelings' during mental health week
Another shared: "I love that you're talking about this topic and sharing it on your social media". One person commented: "How lovely to see you like this".

We feel that while higher growth will lead to higher savings, the same could fund increased government expenditure.

Fitch said the deficit targets presented in the Union Budget on February 1 are higher, and medium-term consolidation more gradual than expected. She also said that the Centre's expenditure increased further once the health crisis was stabilised in order to boost demand.

It is estimated that total expenditure will increase by 1 percent in BE 2021-22 over RE 2020-21 to reach Rs 34,83,236 crore, which is 15.6 percent of GDP.

According to her, the fiscal deficit in Budgetary Estimates for 2021-2022 is estimated to be 6.8 percent of the GDP.

The govt now aims to reach below 4.5 percent by FY26 in a steady manner.

The Budget for 2021-22 represents a comprehensive effort by the government to shore up the country's nascent economic recovery, global ratings agency S&P said on Tuesday, asserting that the aggressive provisioning to help the economy will be costly.