The Economic Survey says the year 2020-21 has been a difficult year from the fiscal perspective and that based on the trends available for April to November 2020, there is likely to be a fiscal slippage during the year.
"In the wake of the global pandemic outbreak, the Centre plus states are expected to register a fiscal slippage in FY 2020-21, on account of the shortfall in revenue and higher expenditure requirements. However, longer term sustainability depends crucially on reviving growth relative to the interest cost of Government debt," says the Economic Survey 2020-21, which was tabled in Parliament today.
The fiscal policy response of the government has been a combination of demand and supply side policies under the ambit of 'Atma Nirbhar Bharat' to cushion against the pandemic shock, and subsequently fuel the economic recovery, it added.
However, going forward, it is expected the government may have to continue with an expansionary fiscal stance, says the Economic Survey 2020-21, which was tabled in Parliament today.
The expenditure support, along with the various key reforms introduced during the year are likely to impart the required momentum to medium-term growth, finds the survey. "The calibrated approach adopted by India allows space for maintaining a fiscal impulse the coming year," it said.
Other key highlights of Economic Survey 2020-21:
- To facilitate a resilient recovery of the economy from the impact of COVID-19,
- India adopted a calibrated approach: Survey
- Expenditure policy in 2020-21 was changed as per needs of an evolving situation. Initially it supported vulnerables but as lockdown was unwound, it was re-oriented to reinflating overall demand through capital spending: Survey
- Owing to the recovery of the economy over the past few months, the monthly revenue collections have witnessed an uptick.
- The monthly GST collections have crossed the Rs 1 lakh crore mark consecutively for the last 3 months, reaching its highest ever in December 2020
- Reforms in tax administration have led to transparency, accountability and enhancing experience of a tax-payer with the tax authority
- The Centre took consistent steps to impart support to the states in the challenging times of the pandemic