India | Biting the fiscal bullet

Markets have cheered today’s budget, which was perceived to be growth-oriented with an emphasis on infrastructure spending. The revised estimates for FY2021 deliver an unexpected boost to growth in the last quarter of the fiscal year. We also acknowledge the government’s efforts to achieve fiscal consolidation without jeopardising capital spending..

What you will learn from this report:

  • India’s fiscal consolidation is predicated on a strong pick-up in disinvestment receipts.
  • India’s fiscal expenditure has been below trend as the government has curbed spending in non-stimulus areas to keep the deficit from ballooning.
  • The share of capital expenditure is projected to rise to 2.5% of GDP, even as the share of overall spending is forecast to fall

Topics: Asia, Global economics, India, Markets, Global economy, Asia Pacific, ASEAN, South East Asia

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