New Delhi: Advance Estimates of GDP released by National Statistics Office ,NSO) will please the government on two fronts on Friday. Not only this, it is more than the nominal GDP growth estimated by the Finance Minister. Nirmala Sitharaman At the end Budget, but it also provides him with additional headroom of around Rs 72,000 crore to stick to the fiscal deficit target for the year.
Assuming a modest growth of 14.4% (without eliminating inflation), the FM had projected the economy to expand to Rs 2,22,87,379 crore. The advance estimate of NSO is nominal GDP of Rs 2,32,14,703 crore.
“The estimate serves as an essential input for the upcoming budget exercise for the next fiscal. Growth in nominal GDP at 17.6 per cent provides additional spending space for the government. As per the nominal GDP estimates, FY22 The budgeted fiscal deficit works out to be 6.5% of GDP.Despite reduction in disinvestment proceeds and additional demand for supplementary grants, the fiscal deficit target of 6.8% of GDP is likely to be achieved in FY22. A 17.6% increase in nominal GDP also results in a substantial decline in the debt-to-GDP ratio, which is noted FRBM,” said M Govinda Rao, Chief Economist A.T. brickworks rating and former member of PM’s Economic Advisory Council.
While disinvestment receipts are expected to be lower than the budget estimate of Rs 1.75 lakh crore, tax revenue is likely to be higher than the Rs 17.9 lakh crore for which Sitharaman had budgeted. Direct and indirect tax receipts have been stronger than his budget team estimated, thanks to strong economic recovery and suppressed demand. Even on the non-tax revenue front, the proceeds from the RBI and some other sources will make up for being cheaper on telecom.
Assuming a modest growth of 14.4% (without eliminating inflation), the FM had projected the economy to expand to Rs 2,22,87,379 crore. The advance estimate of NSO is nominal GDP of Rs 2,32,14,703 crore.
“The estimate serves as an essential input for the upcoming budget exercise for the next fiscal. Growth in nominal GDP at 17.6 per cent provides additional spending space for the government. As per the nominal GDP estimates, FY22 The budgeted fiscal deficit works out to be 6.5% of GDP.Despite reduction in disinvestment proceeds and additional demand for supplementary grants, the fiscal deficit target of 6.8% of GDP is likely to be achieved in FY22. A 17.6% increase in nominal GDP also results in a substantial decline in the debt-to-GDP ratio, which is noted FRBM,” said M Govinda Rao, Chief Economist A.T. brickworks rating and former member of PM’s Economic Advisory Council.
While disinvestment receipts are expected to be lower than the budget estimate of Rs 1.75 lakh crore, tax revenue is likely to be higher than the Rs 17.9 lakh crore for which Sitharaman had budgeted. Direct and indirect tax receipts have been stronger than his budget team estimated, thanks to strong economic recovery and suppressed demand. Even on the non-tax revenue front, the proceeds from the RBI and some other sources will make up for being cheaper on telecom.
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