Economic Survey 2020: The government needs to relax the fiscal gap target for FY20 to boost growth, according to the economic survey 2020 tabled by the government in the Parliament on Friday. The FY21 is expected to pose challenges on the fiscal front, the Economic Survey also said, adding that the government needs to announce counter-cyclical measures to boost growth. Th second economic survey by the government in its second term also said that the high non-tax revenue not sustainable year after year. A cut in capital expenditure may adversely impact growth, it added. Since the last survey by Krishnamurthy Subramanian, India’s economy has deteriorated further, with GDP growth at the slowest pace since 2008-09. India faces its worst economic slowdown in a decade. The government has announced a slew of measures in the last few months to prop up the slowing economy.
The central government had budgeted the fiscal deficit at 3.3 per cent of GDP in budget 2019-20. The medium-term fiscal policy cum fiscal policy strategy statement in the budget documents had projected the deficit at 3 per cent in 2020-21 and 2021-22.
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Meanwhile, Nirmala Sitharaman is slated to present her second budget of the Modi government’s second term on February 1, 2020. The budget comes at a time when the economy is seeing a growth slowdown on account of both global and domestic factors. The growth slipped to 4.5 per cent in the July-September quarter, imperiling job prospects for millions of young people entering the workforce each year. The economy is projected to grow at a mere 5 per cent in the fiscal year 2020, according to the first advance estimates of the economy. The second advance estimates are slated to be released by the government later in the day today.
Source: Financial Express
