lecture3

Union Budget 2020-21 Lecture 3 By Joicy Joy – Free PDF Download

 

Budget Highlights

  • Expenditure: The government proposes to spend Rs 30,42,230 crore in 2020-21, which is  7% higher than the revised estimate of  2019-20.
  • Receipts: The receipts (other than net  borrowings) are expected to increase by  3% to Rs 22,45,893 crore, owing to higher  estimated revenue from disinvestments.

GDP growth

  • The government has assumed a nominal GDP growth rate of 10% (i.e., real growth plus  inflation) in 2020-21.
  • The nominal growth estimate for 2019-20 was 12%.

DEFICITS

  • Revenue deficit is targeted at 2.7% of GDP, which is higher than the revised estimate of  4% in 2019-20.
  • Fiscal deficit is targeted at 3.5% of GDP, lower than the revised estimate of 3.8% in 2019-20.  Note that the government is estimated to  breach its budgeted target for fiscal deficit  (3.3%) in 2019-20 and the medium term fiscal  target of 3% in 2020-21.

Ministry allocations

  • Among the top 13 ministries with the highest allocations, the highest percentage increase is  observed in the Ministry of Communications  (129%), followed by the Ministry of  Agriculture and Farmers’ Welfare (30%) and  the Ministry of Home Affairs (20%)

 

Fiscal Responsibility and Budget  Management targets

  • The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the  central government to progressively reduce its  outstanding debt, revenue deficit and fiscal
  • Fiscal deficit is an indicator of borrowings by the government for financing its expenditure. The  estimated fiscal deficit for 2020-21 is 3.5% of GDP.
  • Revenue deficit is the excess of revenue expenditure over revenue receipts. Such a deficit implies the government’s need to borrow funds to meet expenses which may not provide future returns. The estimated  revenue deficit for 2020-21 is 2.7% of GDP.
  • Primary deficit is the difference between fiscal deficit and interest payments. It is estimated to be 0.4% of  GDP in 2020-21.

 

 

 

Budget 2020 – 2021 | Free PDF