Fiscal deficit at 3.8% in 2019-20(Re) and 3.5% for 2020-21(Be)

Return path committed to fiscal consolidation without compromising on investment

GN Bureau | February 1, 2021


#Nirmala Sitharaman   #finance minister   #finance ministry   #economy   #Union Budget  


With the clear intent of achieving fiscal targets and affirming the government’s commitment towards prudent fiscal management and boosting investments, finance minister Nirmala Sitharaman proposed several measures in the Union Budget 2020-21 in Parliament on Monday.

The finance minister identified the fiscal deficit for FY 2019-20 at 3.8%(RE)  and pegged it at 3.5% (BE) for FY 2020-21 which is consistent with government’s abiding commitment to macroeconomic stability as part of Medium Term Fiscal Policy cum Strategy Statement 2020-21. She said, “Section 4(2) of the FRBM Act provides for a trigger mechanism for a deviation from the estimated fiscal deficit on account of structural reforms in the economy with unanticipated fiscal implications. Therefore, I have taken a deviation of 0.5%, consistent with Section 4(3) of FRBM Act, both for RE 2019-20 and BE 2020-21.”

In order to settle the debate over the credibility and transparency of the projected fiscal numbers, she said, “Let me assure the House that the procedure adopted is compliant with the FRBM Act. This is also consistent with the practices hitherto followed.”

Sitharaman further added that a fundamental overhaul of Centrally Sponsored Schemes and Central Sector Schemes is necessary to align with emerging social and economic needs and to use scarce public resources optimally.

The FM proposed a 21% increase in capital expenditure for the FY 2020-21. The Budget further announced Rs. 22,000 crore for equity to fund certain specified infrastructure finance companies providing much needed long term finance to the sector.
 
The budget projects a 10% estimated nominal growth of GDP for 2020-21 on the basis of trends available. The Finance Minister notes “Recently government has undertaken very significant tax reforms for boosting investments. However, expected tax buoyancy will take time.”

Emphasising the importance given to strengthen the spirit of co-operative federalism, Sitharaman announced the acceptance of the 1st report of XV Finance Commission in substantial measure. The Budget proposes to transfer to the GST Compensation Fund balances due out of collection of the years 2016-17 and 2017-18, in two instalments. Hereinafter, transfers to the fund would be limited only to collection by way of GST compensation cess.
 

Comments

 

Other News

Maharashtra flood situation grim, rescue works on

At least 79 people were killed and 56 were missing as the flood situation in Maharashtra remained grim on Saturday. Torrential rainfall in various parts of the state, coinciding with high tides and also discharge from dams, led to inundation of many regions and floods caused landslides in some places too.

Maharashtra partners with Climate Group to promote electric vehicles

Within days of announcing its new Electric Vehicle Policy 2021, Maharashtra Friday announced its partnership with Climate Group’s EV100 network to push and promote electric vehicles and reduce CO2 emissions. The policy, meanwhile, was also notified on Friday. Climate Gro

As rains batter Maharashtra, state on red and orange alert

Severe rains battered Raigad, Thane, Ratnagiri, Kolhapur and Satara regions of Maharashtra with rains in Ratnagiri district breaking the 40-year record. As rivers in these districts crossed warning levels, the National Disaster Response Force (NDRF), the State Disaster Response Force (SDRF), Coast Guard, N

Will next wave affect children? That`s mere speculation, says expert

Dr. Praveen Kumar, director, department of pediatrics, Lady Hardinge Medical College, New Delhi, talks about various issues including impact of Covid-19 on children, the need to protect them, and vaccinating pregnant women and lactating mothers. How has the pandemic affected

A public policy bridge across the digital divide

There has been an active debate globally and in India about the digital divide. This debate has gained additional weight during the Covid-19 pandemic because the acceleration of the need for digital access to health and other social services has thrown this issue into sharper relief. A critical public poli

Connecting India faster – with satellite communications technology

The need for digital connectivity has never been more pressing. The pandemic has changed work ethos and day-to-day lives of people across the globe. The new norm is ‘Technology First’, as with people moving to digital connectivity to fulfill their requirements in daily life. India’s dream

Visionary Talk with Sanjay Jha, Political Analyst On The Current Political Scenario



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter