Fri, Nov 13, 2020
The fiscal cost of these measures amounts to Rs 2.65 trn, i.e. 1.4% of GDP, but Nomura expects the current year’s budgetary impact to total Rs 1.2 trn (0.64% of GDP). Nomura expects the central government’s fiscal deficit to balloon to 8.3% of GDP in FY21 (year ending March 2021) vs the original budgeted target of 3.5% of GDP, with risks skewed towards an even higher deficit.
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The measures that also include additional fertiliser subsidy and already announced production-linked incentive scheme for manufacturing units, totalled Rs 2.65 lakh crore, taking the cumulative stimulus package announced since the lockdown to almost Rs 30 lakh crore, or 15 per cent of the Gross Domestic Product (GDP).
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