Page 48 - DHC Budget Book 2021-22 Final
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INDIA BUDGET 2021-22
300% 250% 200%
150% 116% 100% 57%
249%
50% 0% -50% -100%
-7%
Apr-20 May-20 Jun-20
-21% -47%
-39% Sep-20
129%
Oct-20
82%
Dec-20 (Flash)
Growth in Capital Expenditure Source: Department of Expenditure
Grpwth in Revenue Expenditure
Jul-20
Aug-20
Nov-20
Figure 3: Trend in Growth of Monthly Expenditure of CG during FY 2020-21
Fiscal Consolidation
Originally, the fiscal deficit target for FY20 was revised to 3.8% while pegged the target at 3.5%. The Centre's fiscal deficit widened to 145.5 per cent of the full-year's Budget Estimates (BE) at H 11.58 lakh by December 2020, according to data released by Controller General of Accounts (CGA). In order to cater to the increased demand for resources,
the target for gross market borrowings of the CG for the financial year 2020-21 was revised from
the Budget estimate of H 7.8 lakh Crs. to H 12 lakh Crs., 65% more than what it had borrowed in the corresponding period in the previous financial year which can be squarely attributed to the contraction of the economy. Owing to the unprecedented humongous slack in the overall economy as a whole, the gross tax revenue earned by the Indian government during the impacted period April to November 2020 fell by 12.6% to H 10.26 lakh Crs.
Inflation, mainly driven by food prices, remained above 6 per cent for much of the year, given supply disruptions. The softening of CPI inflation recently reflects easing of supply side constraints that affected food inflation. Noteworthy statistics contributing to the overall fiscal deficit & V- shaped recovery:-
The external sector provided an effective cushion to growth with India recording a Current Account Surplus of 3.1% of GDP in the first half of FY 2020-21.
Net Foreign Direct Investment (FDI) inflows of USD 27.5 billion during April-October, 2020 - 14.8% higher as compared to the first seven months of FY 2019-20.
Net Foreign Portfolio Investment (FPI) Inflows recorded an all-time monthly high of 9.8 Billion Dollars in November 2020.
Desirable to use counter-cyclical fiscal policy
to enable growth during economic downturns. Counter-cyclical fiscal policy refers to the
steps taken by the government that go against the direction of the economic or business cycle. Thus, in a recession or slowdown, the government increases expenditure and reduces taxes to create a demand that can drive an economic boom.
Survey 2020-21 has innovatively constructed a novel Bare Necessities Index at rural, urban & all India level, with 26 indicators on 5 dimensions viz.- sanitation, water, housing, micro-environment, & other facilities.
46 Building a Resilient and Confident India
