A building-block Budget Gives a push to capex while easing fiscal consolidation Based on the recommendations of the Fifteenth Finance Commission, the Central government has agreed to amend the FRBM Act. The deficit and debt targets of the existing Act have been rendered irrelevant due to the impact of the pandemic and the longer-term erosion of tax and non-tax revenues relative to GDP. Given these economic realities, the Central government has substantially raised its fiscal deficit-to-GDP ratio for the period 2020-21 (RE) to 2025-26. In 2020-21 (RE), the fiscal deficit has been raised to 9.5 per cent of GDP and that in 2021-22 (BE), to 6.8 per cent. It may then gradually be brought down to 4.5 per cent by 2025-26. Largely based on this additional borrowing, the government proposes to increase its revenue expenditure by 28.1 per cent in 2020-21 (RE) over the actuals of 2019-20, and capital expenditure by 30.8 per cent over the same period. However, compared to these RE numbers, revenue expenditure in 2021-22 is budgeted to contract by (-)2.7 per cent and growth in capital expenditure is estimated at 26.2 per cent.