New Delhi: Moody’s Investors Service on Friday said that India conservative budget The assumptions leave room for the government to respond to the prevailing macroeconomic and pandemic risks next year.
The government expects inflation-adjusted real GDP growth for FY21 to come in at 9.2 per cent in the current fiscal ending March 2022, up from 13.6 per cent in the first half of the fiscal till September will be after
Reflecting the government’s conservative growth sentiments, Moody’s said revenue receipts grew by only 27.2 per cent in the revised budget estimates for FY21, after reconciling fiscal accounts at the end of March 2022, for further gains, Moody’s said. Leaves some room, Moody’s said.
Moody’s in its report said the focus on capital expenditure in the 2022-23 budget supports near-term growth, but presents challenges for long-term fiscal consolidation.
India’s budget limits the central government’s deficit to 6.4 per cent of GDP in FY22, up from an estimated 6.9 per cent in FY21.
“The Budget is characterized by a continued emphasis on rising capital expenditure to sustain growth momentum in the near term, as the economy continues to rebound from its pandemic trough.
“While conservative budget assumptions leave room for the government to respond to the prevailing macroeconomic and pandemic risks in the next year, the path towards the government’s medium-term deficit target of 4.5 per cent of GDP by FY2025 remains undefined. is,” it said.
In the first eight months of the financial year, the central government registered a growth of 67.2 per cent in revenue receipts.
Strong revenue results offset lower performance on disinvestment. The government now expects disinvestment receipts of only Rs 78,000 crore (about 0.3 per cent of GDP) in FY21, against the target of Rs 1.75 lakh crore (0.8 per cent of GDP) announced in last year’s budget.
“Relative to the government’s assumption of 11.1 per cent nominal GDP growth for FY22, the 6 per cent growth in revenue receipts appears to be achievable, buoyed against the fall in corporate tax, income tax, and goods and sales tax (GST). ) balances receipts in dividends and other non-tax revenues,” Moody’s said.
It said the key risks to the deficit target of 6.4 per cent of GDP for FY22 include pandemic and inflation. Both of these factors can induce additional spending to support the economy, although performance risks related to capital expenditures can reduce overall spending.
“The announced budget is in line with our vision of gradual fiscal consolidation and growth in government debt to approximately 91 percent of GDP over the next year,” Moody’s said.
The government expects inflation-adjusted real GDP growth for FY21 to come in at 9.2 per cent in the current fiscal ending March 2022, up from 13.6 per cent in the first half of the fiscal till September will be after
Reflecting the government’s conservative growth sentiments, Moody’s said revenue receipts grew by only 27.2 per cent in the revised budget estimates for FY21, after reconciling fiscal accounts at the end of March 2022, for further gains, Moody’s said. Leaves some room, Moody’s said.
Moody’s in its report said the focus on capital expenditure in the 2022-23 budget supports near-term growth, but presents challenges for long-term fiscal consolidation.
India’s budget limits the central government’s deficit to 6.4 per cent of GDP in FY22, up from an estimated 6.9 per cent in FY21.
“The Budget is characterized by a continued emphasis on rising capital expenditure to sustain growth momentum in the near term, as the economy continues to rebound from its pandemic trough.
“While conservative budget assumptions leave room for the government to respond to the prevailing macroeconomic and pandemic risks in the next year, the path towards the government’s medium-term deficit target of 4.5 per cent of GDP by FY2025 remains undefined. is,” it said.
In the first eight months of the financial year, the central government registered a growth of 67.2 per cent in revenue receipts.
Strong revenue results offset lower performance on disinvestment. The government now expects disinvestment receipts of only Rs 78,000 crore (about 0.3 per cent of GDP) in FY21, against the target of Rs 1.75 lakh crore (0.8 per cent of GDP) announced in last year’s budget.
“Relative to the government’s assumption of 11.1 per cent nominal GDP growth for FY22, the 6 per cent growth in revenue receipts appears to be achievable, buoyed against the fall in corporate tax, income tax, and goods and sales tax (GST). ) balances receipts in dividends and other non-tax revenues,” Moody’s said.
It said the key risks to the deficit target of 6.4 per cent of GDP for FY22 include pandemic and inflation. Both of these factors can induce additional spending to support the economy, although performance risks related to capital expenditures can reduce overall spending.
“The announced budget is in line with our vision of gradual fiscal consolidation and growth in government debt to approximately 91 percent of GDP over the next year,” Moody’s said.
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