Garg said the objective of kick-starting growth and building growth momentum does not seem to have been addressed effectively in the budget.
Former finance secretary Subhash Chandra Garg has estimated that if the acknowledged off-budget spending (net of repayments to NSSF), certain other fiscal expenditure including borrowings by some ‘non-commercial’ public undertakings are included, the Centre’s ‘actual’ fiscal deficit would turn out to be 4.94% of GDP for FY21, against 3.5% budgeted.
“With income of the government, both revenue and capital receipts, amounting to Rs 22,45,893 crore, the real fiscal deficit for FY21 is Rs 11,07,105 crore or 4.94% of estimated GDP of (`224.9 lakh crore),” Garg wrote in his blog.
According to Garg, such extra off-budget spending in FY20 were to the tune of Rs 4,62,982 crore. If this is included in the reported fiscal deficit of Rs 7,66,846 crore (RE), then the actual fiscal deficit for the year would be Rs 12,29,828 crore. This is 6% of the estimated nominal GDP of Rs 204.4 lakh crore, while the budgeted figure (RE) is 3.8%.
To arrive at the actual fiscal deficit for FY21, Garg has included the Centre’s total off-budget and outside the budget expenditures of Rs 1,32,647 crore (bank/FI recapitalisation, food subsidies, irrigation and sanitation schemes) and another Rs 1,78,121 crore other fiscal expenditures — loans raised by government-owned Air India asset holding, BSNL, MTNL, FCI borrowings other than from NSSF and cash credit, railways and NHAI.
“Total expenditures estimated to be incurred by the government, counting all the budgeted, off-budget, including below the line expenditure and expenditure of non-commercial public enterprises and entities of the government is Rs 31,61,534 crore for FY20 and `33,52,998 crore for FY21,” Garg said. In RE for FY22, the Centre has estimated total receipts (excluding debt) to be Rs 19,31,706 crore, 7.2% lower than BE for the year.
Garg said the objective of kick-starting growth and building growth momentum does not seem to have been addressed effectively in the budget. “Investments in roads, railways and metros have been the major planks of infrastructure investment by the government. The outlays of these programmes have not seen any nominal growth in 2020-21 (in real terms, the provisions are actually 8-10% lower),” he said.