May miss Budget targets, but see strong recovery: DEA secy

NEW DELHI: The government may be unable to meet its Budget estimates for the current financial year (2020-21) due to the Covid-19 crisis, but expects a V-shaped recovery and the contraction in economic growth may not be as sharp as estimated, a top finance ministry official said on Thursday.
“We will not be able to achieve our Budget Estimate (BE) figures, but the kind of contraction some of the people are mentioning may also not turn out,” economic affairs secretary Tarun Bajaj said at a Ficci event.
His colleague and finance secretary Ajay Bhushan Pandey added that tax trends were encouraging, although some segments such as hospitality, education and tourism are facing difficulty. During the first quarter, GST collections were around 70% of the average, while the direct tax mop-up was around 80% of last year’s level.
Bajaj said the government on the revenue front. He also said the government had been able to garner some additional revenue from excise duty on petrol and diesel.
“At this point of time, I have some calculations. I have some plans in mind... The RBI has assisted us in a great deal this time. At this point of time, monetisation is not on the table at all. It has not been discussed with the central bank also,” Bajaj said.
Debt monetisation, which is keeping a close eye on 14-15 parameters, which provide a clue to the direction the economy is moving. He said indicators such as e-way bill, power consumption, GST revenues and others had shown promising results so far. He was confident that the growth will rebound next year.
Bajaj also made it clear that monetisation of the fiscal deficit was not part of the agenda as of now and said there was some positive signals means the RBI printing more money to help meet higher expenditure, has been talked about as an option to meet additional spending needs.
Bajaj said the Covid-19 pandemic had also presented an opportunity to push through critical reforms and the government was now focusing on infrastructure spending and ensuring the staterun enterprises meet their capital expenditure targets.
“I have spoken to large infrastructure spend departments and I have assured them that even if I have to borrow a little more, I will do that. But you should achieve your infra spend targets for the current year,” he said, adding that Rs 2-3 lakh crore would be spent by state-run firms.
The Indian economy, Asia’s third-largest, has been hit hard by the strict lockdown imposed to fend off the spread of the coronavirus. The lockdown had stalled economic activity and most estimates now predict that the economy will see a sharp contraction.