The Narendra Modi government, which kept a hawk-eye on spending over the past seven years, has said that the fiscal deficit for 2020-21 will stand at 9.5%. This would be the highest at least since India liberalised its economy in 1991.
For context, the fiscal deficit for 2019-20 was 4.6% of India’s gross domestic product (GDP). On the face of it, a high fiscal deficit—the difference between the government’s revenues and expenditure—is alarming. It increases government borrowings and sends it into an interest repayment cycle, which only further increases spending in the future.
Read More at https://qz.com/india/1968966/india-says-no-to-austerity-to-help-economy-out-of-covid-19-slump
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