Budget 2021 may show Centre's fiscal deficit at 5.5% of GDP for FY22

With just days to go for Budget presentation, all eyes are on the Centre’s fiscal maths. The fiscal deficit could narrow to 5.5 per cent of GDP in FY22 from around 7 per cent in FY21, according to Ecoscope: Budget 2021 Preview Report by Motilal Oswal Financial Services.

There was no massive fiscal stimulus in CY20, however, the significant shortfall in receipts is likely to lead to the doubling of fiscal deficit to an estimated 6.9 per cent of GDP in FY21, (from the budgeted 3.5 per cent), according to the report.