Spend, earn, tax: Finances of Union Budget 2021 explained in nine charts

Taxes on individual incomes will now bring more revenue to the government than taxes on corporate profits

Budget 2021 plans to spend a staggering Rs 11.7 trillion in only three months till March, a record of sorts and taking total spending to Rs 34.5 trillion in FY21. That’s a 28 per cent boost over the previous year. Expenditure in FY22 is, however, expected to remain flat. If spent on the said lines, the Budget’s size with respect to India’s gross domestic product will increase--a welcome sign (chart 1). 

Most of this fiscal expansion will be funded by borrowing, taking the fiscal deficit to 9.5 per cent of GDP this year, and to 6.8 per cent in FY22.