India’s Union Budget 2021–22 and fiscal policy
10 February 2021
Author: Alok Sheel, ICRIER
Government expenditure is estimated to be 17.7 per cent of GDP in 2020–21, a sharp increase from 13.2 per cent in 2019–20 and 12.5 per cent in 2018–19. From a macroeconomic perspective, the focus areas are the robustness of nominal GDP and revenue growth assumptions, the budget deficit including the stimulus component and whether the stimulus is of optimal structure and scale to bolster growth. Fiscal policy is critically important in circumstances when monetary policy is constrained by impaired bank and corporate balance sheets.
The nominal GDP growth of 14.5 per cent in 2021–22 implicit in budget projections seem reasonable considering the economy is expected to rebound on the back of sharp contraction.
How economic management and outcomes differ across the G20
Photo: HTPremium
Alok Sheel
Stimulus-injected rich countries suffered low output loss amid high covid mortality while India and others have fared worse
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Although the rapid spread of covid led it to be regarded as a pandemic, covid-related mortality, equalized to deaths per million, varies sharply across countries. On average, covid mortality in the Transatlantic- Mediterranean region (comprising the Americas, Europe, Middle East, North Africa and Central Asia) is about 10 times than in more populous South and East Asia. Covid mortality has been selected as a proxy for the relative virulence of covid, rather than the number of infections, as testing rates and protocols vary greatly across nations.