In a year gripped with pandemic and lockdown the govt saw a record spending to revenue gap as it continued to pump spends to keep the economy engine chugging along.
The fiscal gap for the year ended March 31 was recorded at 9.3% of GDP, which is below the govt’s estimate of 9.5% but still record high gap. The gap was below estimates as the govt’s revenue collection target beat estimates as the kitty totalled upto Rs 15.6 lk crore, 105% of the estimate.
This phenomena of overspending vs historical averages is not unique to India in the pandemic year. As Bloomberg reports emerging markets have seen their fiscal gaps double from 4.7% to 9.8% of GDP in the year gone by.
India is aiming to curtail the fiscal gap to 6.8% in the current financial year.