Budget 2022: Strong fiscal position to support growth push, says Eco Survey

The government has the fiscal space to provide additional budgetary support to fuel growth, Economic Survey 2021-22 laid in the Parliament today, states. The government's confidence stems from the strong rebound in revenues during the year which will not only allow it to comfortably meet its targets for the year but maintain the support, and ramp up capital expenditure, the survey says.

Coming a day before the presentation of the Union Budget, the assessment of the current year's fiscal position is a strong indication of the growth push the government is likely to provide for the next year.

The survey notes that revenue receipts of the central government during April- November 2021 have gone up by 67.2% (YoY), as against an estimated growth of 9.6% in the 2021-22 budget estimates. “The tax collections have been buoyant for both direct and indirect taxes. The gross monthly GST collections have crossed ₹1 lakh crore consistently since July 2021. On account of a sustained revenue collection and a targeted expenditure policy by the Government of India, the fiscal deficit for April-November 2021 has been contained at 46.2% of budget estimates (BE) which is nearly one third of the proportion reached during the same period of the previous two years (135.1% of BE in April-November 2020 and 114.8% of BE in April-November 2019). The primary deficit during the period April to November 2021 turned up at nearly half of the level it had reached during April to November 2019. This implies that the government has the fiscal capacity to maintain the support, and ramp up capital expenditure when required. The strong revival in revenues also provides government with fiscal space to provide additional support as well, if necessary," the survey says.

Citing overall macro-economic stability indicators, the survey suggests that the Indian economy is well placed to take on the challenges and witness a GDP growth of 8.0-8.5% in 2022-23.