- 7% budgetary deficit may remain current year
- Country’s GDP may decline for the first time in 4 decades
The government’s revenue has been affected due to coronavirus and due to this it may fail to meet the budget target. Economic Affairs Secretary Tarun Bajaj said on Thursday about the economic growth, revenue and fiscal deficit targets for the current business year, that we cannot fail to meet the budget target.
The epidemic has affected tax collection. With this, the revenue has come under pressure due to the government’s economic relief programs. It is believed that for the first time in more than four decades, the country’s GDP may decline.
Fears of double the budget target
Bajaj did not give any new target of budgetary deficit. However, according to a survey conducted by economists by Bloomberg, the current fiscal year budgetary deficit could be 7 percent of GDP. This is double the budget target for this year.
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No hope of getting funds from RBI to bridge the deficit
Economic experts are also hoping that the Reserve Bank of India (RBI) can give money to the government to reduce the fiscal deficit. Bajaj, however, said that no proposal to sell government bonds to RBI is yet to be considered. The government has not yet consulted RBI on this subject.
There is a possibility of a fall in GDP by 10.6 percent
Without giving any estimate, he also said that there may not be as much decline in GDP as is being estimated. According to the International Monetary Fund (IMF), the country’s GDP may decline by 4.5 percent this year. Goldman Sachs Group Inc. is expecting a 5 percent fall. According to Bloomberg Economics, GDP could decline by 10.6 percent in the current financial year.
We hope for recovery
Regarding the recovery, Bajaj said that it could be a V shape. He said that the recovery of advance tax is going well these days. The recovery in June and July was better than we expected. Agriculture has emerged as a ray of hope in the current crisis.
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