Union Budget 2021:DEA secy: Budget for FY22 to be reform-oriented

Union Budget 2021-22: The Budget for FY22 will reflect the government’s strong commitment to maintain the pace of key reforms, as exhibited in the aftermath of the Covid-19 outbreak, economic affairs secretary Tarun Bajaj said on Friday.

Overall official expenditure in the current fiscal will likely end on a “positive note”, Bajaj said at a CII event. He added that the government’s capital expenditure went up by as much as 15%, year on year, in November and overall spending rose by 5%, having reversed a fall earlier this fiscal, especially in the wake of the Covid-induced lockdown.
GST mop-up in December is likely to be around the Rs 1-lakh-crore level, as witnessed in the past two months, and overall tax collections are better than what was expected in mid-September, Bajaj added.

The government had budgetted to spend Rs 30.4 lakh crore in FY21, against Rs 27 lakh in the last fiscal. However, its fiscal math went haywire due to the pandemic — revenue collections got hit but the requirement of official spending to stimulate growth and protect lives of the citizens only rose.

India’s economy will more than offset the deep contraction suffered in the current fiscal in FY22, with the GDP, in absolute term, crossing the level witnessed in FY20, the secretary said.

Nominal GDP for FY20 stood at Rs 203.4 lakh crore and real GDP at Rs 145.7 lakh crore. Thanks to lower-than-expected contraction in real GDP in the September quarter (7.5% vs a record 23.9% slide in Q1), some agencies have bettered their projections for this fiscal and projected a rebound next year. The latest projections for a contraction in India’s real GDP for FY21 are in the 7.7-10% range, with an expectation of a sharp rebound in the next fiscal.