Cash Support To COVID-Hit Economy With Fiscal Consolidation In Focus: Finmin Report
The government has initiated various measures to provide relief and financial support to various sectors of the COVID-19 hit economy.
The government has initiated various measures to provide relief and financial support to various sectors of the COVID-19 hit economy, at the same time, fiscal consolidation is also under focus, the Finance Ministry said in a report.
Increasing the buoyancy of tax revenue through improved compliance, mobilisation of resources through monetisation of assets, improving efficiency and effectiveness of public expenditure etc. are the important measures directed towards this goal, it said. According to a statement on half-yearly review of the trends in receipts and expenditure in relation to the budget at the end of the first half of the financial year 2021-22, Gross Tax Revenue (GTR) at the end of September 2021 was Rs 11,83,808 crore.
This was 53.4 percent of BE 2021-22 of Rs 22,17,059 crore and reflects an increase of Rs 4,62,912 crore (64.21 percent) over GTR for Rs 7,20,896 crore in the corresponding period of previous year. The Budget has projected fiscal deficit of 6.8 percent of gross domestic product (GDP) for the current fiscal ending in March 2022.
Fiscal deficit has been estimated at Rs 15,06,812 crore which is 6.8 percent of projected GDP (Rs 2,22,87,379 crore). The fiscal deficit of Rs 5,26,851 crore in H1, 2021-22 was about 35 percent of BE, it said. Lower fiscal deficit during H1 implies that the economy is, slowly but surely, getting back on the rails, it said. Observing that the budget 2021-22 was presented in the backdrop of unprecedented Covid-19 crisis, it said, there has been a definite uptick in tax collections and Government’s revenues till September of the current financial year even as India emerges from the deleterious impact of two waves of CoVID-19 pandemic. “Increased tax collections also implies that the country’s economy is, slowly but surely, getting back on the rails,” it said. Buoyancy in revenue receipts, particularly under tax receipts, in H1 of the current financial year helped achieve all three mid-year benchmarks (fiscal deficit, revenue deficit and total non-debt receipts) prescribed under the FRBM Rules, it said.
Better fiscal results are expected with the increased momentum of the economic recovery in the second half the current financial year, it said. With regard to forex reserve, it said, it has increased to USD 638.6 billion as on September 24, 2021 from a level of USD 577.0 billion at end-March 2021. The average exchange rate was Rs 73.93 per USD during April-September of 2021-22 as compared to Rs 75.13 per USD in the corresponding period of previous year.