Budget 2021: From tax, fiscal austerity, debt, expenditure to disinvestment - Edelweiss crunches the numbers
Union budget FY22 will be announced on Feb 1, 2021 and will gather interest to get a signal on post-crisis fiscal temperament. Edelweiss expects FY21 fiscal deficit to be 7% of the GDP with a promise of glide path ahead. While fiscal austerity is not prescribed, the rising debt burden will limit fiscal counter-cyclicality. In that sense, the budget is likely to be a fine balancing act.
FY21 will see a fall back in tax revenues owing to the growth contraction. What is more worrisome is the fall in non-tax revenue (lower RBI dividends) and inability to meet disinvestments targets: Reuters