The actual fiscal cost of the Centre’s Rs 21-trillion ‘Atmanirbhar Bharat’ Covid-19 package was lowest among 20 major nations, said a recent research report by Motilal Oswal.

“The true fiscal stimulus in FY21 (fiscal year 2020-21), as per our estimates, amounted to only around Rs 2.5 trillion or 1.3 per cent of gross domestic product (GDP). The bulk of the fiscal support constituted loan guarantees and non-budgetary measures,” the report said.

Business Standard’s own calculations suggest that the Centre’s fiscal impact amounts to around Rs 2.28 trillion, or around 1.2 per cent of GDP. This includes tax revenue foregone, outlay towards free food distribution and cash handouts, increase in NREGA, interest subvention, increase in viability gap funding for social infrastructure, and initial support from the centre’s coffers to kickstart some of the liquidity and credit measures announced by Finance Minister Nirmala Sitharaman.

Additionally, not all of this amount will necessarily be borne in the fiscal year 2020-21. A portion of the total fiscal burden, especially on the rural sector and agriculture-related announcements, will come out of the centre’s budget over the next two-five years.

Motilal Oswal, it its report last week, said that this feature was not unique to India.

“Although the support packages in some developing economies, such as Thailand, Brazil, South Africa, and Malaysia cost 12–17 per cent of GDP, the actual fiscal stimulus is under 5 per cent of GDP for all. This is true for some developed economies as well.”