India recorded a fiscal deficit of 9.3% of GDP in 2020-21, 0.2% lower than the revised estimate of 9.5% of GDP, according to the Controller General of Accounts (CGA). Budget 2020-21, presented before the COVID-19 lockdowns, had set a fiscal deficit target of 3.5% of GDP. The slightly better than expected fiscal performance doesn’t necessarily bode well for this year’s fiscal pressures, despite the Reserve Bank of India’s significantly higher than expected dividend of ₹99,000-odd crore. The government has set a target to reduce the fiscal deficit this year to 6.8% of GDP. CARE Ratings chief economist Madan Sabnavis pointed out that the higher than estimated expenditure in 2020-21 was actually driven by higher revenue expenditure of ₹75,000 crore.

Source: The Hindu May 31, 2021 11:55 UTC