Business Standard

Nirmala Sitharaman's Budget again reveals structural fiscal constraint

It recognises it cannot afford space for expansionary fiscal policy

fiscal deficit, economy, illustration
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Rathin Roy
In my column on the FY20 Budget (A silent fiscal crisis, July 5, 2019), I had warned that the government faced a structural fiscal constraint that was concealed by using incorrectly optimistic numbers for revenue receipts. This year’s Budget is transparent. But the government continues to be heavily fiscally constrained due to inadequate revenue receipts. A large part of the incremental fiscal deficit is because of this constraint. 

In FY20, gross tax revenue receipts are Rs 3 trillion lower than projected in the budget estimates. Half of this is because of a shortfall in corporate taxes, which is
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First Published: Feb 01 2020 | 9:51 PM IST

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