The fiscal deficit for FY21, according to provisional estimates, was 9.3% of gross domestic product (GDP), lower than the governments revised estimate of 9.5% in the February budget.
Barring agriculture, which continued its stellar performance, growing at 3.6% in FY2021, and electricity that grew at 1.9%, every other sector contracted during the year. The contraction in trade (–18.2%), construction (–8.6%), mining (–8.5%) and manufacturing (–7.2%) is particularly ominous, as these account for the bulk of jobs, especially low-skilled ones. And especially since any hope that the contraction may prove a temporary setback has been scotched by the second wave of Covid in March.
Spend, government, spend, to trigger growth
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Last Updated: May 27, 2021, 11:25 PM IST
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Synopsis
Higher spending is needed to contain the toll on the economy due to lockdowns in the second wave of the pandemic.
Reuters
What about the fiscal deficit? India is a young, growing country, and growth will generate the resources to pay off debt. The point is to feed and sustain growth.
At this juncture, says the RBI Annual Report, the Indian economy is at a cusp. A combination of public and private investment can lead on to fast growth. However, private investment has been timid, and public investment has to has the added role to play of crowding in private investment, even as it increases capital formation out of budgetary resources. RBI’s insight is no recondite truth. The sentiment is widely shared by industry as well, as reflected by banker and CII President Uday Kotak’s call for one more round of fiscal stimulus.
As per the Telecom Regulatory Authority of India data, Indias wireless subscriber base grew by 8.3 million to total 1,168 million users in the month of February which is the highest addition in the last one and a half year, the ratings firm said in a note.