Despite the rollout of several so-called freebies by the AAP government, Delhi’s fiscal deficit is the lowest in the country. Sustaining its fiscal health, however, will require more revenue generation in future
If an Indian national lives in New Delhi but earns rental income from a house she owns in London, then, along with all other income that she earns within India, this rental income too, will attract tax.
The savings rate, expressed as a percentage of the gross domestic product, reflects the pool of investible funds within the country that are available for the government and private businesses to use for investment purposes.
With the economy in deep crisis, what were the options before Finance Minister Nirmala Sitharaman in the Union Budget for 2020-21? With limited resources at her disposal, she has tinkered with several aspects of the economy. But will this strategy work in getting the Indian economy back on track?
Union Budget 2020: The most crucial thing for boosting growth is not whether the fiscal deficit target is flouted or not, rather the level of revenue deficit and the govt’s intention towards reducing it to 0% (of GDP) in the next few years.
By completely ignoring Revenue Deficit, and only focusing on containing Fiscal Deficit, the government has ensured that the FRBM Act now hurts growth – which is exactly opposite of what fiscal consolidation was supposed to do.
There is also a growing concern about the credibility of Budget numbers and many argue that the first thing to do is to reduce the gap between the numbers projected in a Budget and what actually happens.
In his blog, S C Garg, former Economic Affairs secretary, has claimed that the actual fiscal deficit for the last financial year and the current one is more than a full percentage point higher than the official data.