Conservative budgeting

Fiscal space should be used carefully

The Union government is confident of achieving the fiscal deficit target of 6.4 per cent of gross domestic product (GDP) in the current fiscal year despite seeking Parliament’s approval to spend Rs 3.26 trillion over the Budget estimates. This has been made possible because of conservative budgeting at multiple levels. The government, for example, budgeted for 9.6 per cent growth in its tax revenue over the revised estimates for 2021-22. The revised estimates were calculated to have grown by more than 23 per cent over the previous year. The government also assumed in nominal terms the Indian economy would grow