Depends on tax buoyancy, asset monetisation, divestment
Finance Minister Nirmala Sitharaman has pegged fiscal deficit for the coming year 2021-22 at 6.8% of GDP and aims to bring it back below the 4.5% mark by 2025-26.
The original fiscal deficit target for 2020-21 was 3.5%. However, in reality, the deficit shot up to a high of 9.5% of GDP due to the double impact of the COVID-19 pandemic low revenue flows due to the lockdown and negative economic growth clubbed with high government spending to provide essential relief to vulnerable sections of society, as well as a stimulus package aimed at reviving domestic demand.
Winter fog affords poor visibility. In this difficult-to-read pandemic year, it’s a problem Finance Minister Nirmala Sitharaman must contend with as she prepares to present her third budget on Monday. In a highly informal economy, where unorganised sector and millions of self-employed dominate the landscape, data is perpetually scarce and statistical clarity poor. This has only worsened in a virus-ravaged year when data gets distorted and any comparison looks inherently flawed.
In this inscrutable year, on the eve of the crucial Budget 2021, ET Magazine has tried to take stock of something pertinent, something the government should keep in mind: what do people want? ET Magazine conducted a three tier poll of 100 CEOs, 27 economists and 3,476 middle-class Indians (readers of www. economictimes.com) over a fortnight in January to better understand the year gone by, where India is today and do some crystal-gazing into the future. What do they want from this budget? How do they lo
Read more about Budget 2021: Go for bond, not cess to fund Covid expenditure, say experts on Business Standard. The amount raised through these bonds would not be high since domestic borrowing will exert pressure on yields.
This will be the biggest annual contraction in records going back to 1952, according to Bloomberg. The estimate by the NSO was close to the Reserve Bank of India’s estimate of 7.5 per cent contraction. Economy trackers had estimated annual real GDP growth to be in the range of negative 6.5 to negative 9.9 per cent. Nominal GDP will contract by 4.2 per cent, the release showed. As tax revenue grows in consonance with nominal GDP, revenue stress could be of a magnitude that is closer to this number. Advance estimates are important as the Union Budget uses these numbers for assuming GDP growth rates at current prices for the next financial year, on the basis of which all crucial numbers such as the fiscal deficit and tax numbers will be calculated.
Rebooting Economy 56: Why India should follow agricultural development-led industrialisation growth model
Most successful, industrialised and fast-growing Asian economies like Japan, South Korea, China, and Vietnam followed this model, as did Indonesia, Malaysia, and Thailand. Why can t India?
Prasanna Mohanty | January 6, 2021 | Updated 21:06 IST
Agriculture s share of gross capital formation (GCF) fell from 8.5% of the total GCF of economy in FY12 to 6.5% in FY19
The economic reforms that began slowly in 1980s and got turbo-charged in 1991 did bring high growth, but this growth is perhaps unlike what was anticipated. The Lewisian structural transformation - resources shifting from low productive agriculture to high productive manufacturing (industrialisation) that brought prosperity to developed economies in the West (the US and parts of Europe) and the East (Japan, Korea and China s Taipei) - did not occur.