Budget 2021
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Government Gives Itself A Fiscal Long Rope break of the government’s fiscal position has been confirmed. This is what the fiscal numbers look like: FY21 fiscal deficit at 9.5%. As part of this, the government will borrow another Rs 80,000 crore in the next two months of this year alone. For FY22, the fiscal deficit is pegged at 6.8% of GDP. The gross borrowing will be Rs 12 lakh crore. The total expenditure for FY21 has settled at Rs 34.50 lakh crore. For FY22, total expenditure is pegged at Rs 35 lakh crore. The new fiscal roadmap is also taking a slow route. The fiscal deficit will be reduced to 4.5% by FY26. 3% fiscal deficit target now a forgotten dream? (Aside: As an attempt to bring transparency, the Food Corporation’s borrowings from the National Small Savings Funds will be stopped) Greater Reliance On Borrowings From Small Savings The government has pegged the FY22 fiscal deficit at 6.5% of GDP or Rs 15.06 lakh crore. But market borrowings at about Rs 12 lakh crore. How? F...