While presenting the Union Budget for the year 2021, finance minister Nirmala Sitharaman said that the Covid-19 pandemic resulted in weak revenue inflow for the government during the year.
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Fiscal deficit for FY22 has been pegged at 6.8 per cent.
Sitharaman also proposed a sharp rise in capital expenditure of the government and provided Rs 5.54 lakh crore which is 34.5 per cent more than the budget estimate of 2020-21.
The government would need another Rs 80,000 crore for which it would approach the market in the next few days.
Further, she said that the centre will provide over Rs 2 lakh crore to states and autonoumous bodies for their capital expenditure.
India’s fiscal deficit had breached its previous Budget target in July itself as the economy faced the most stringent lockdown in the first quarter to contain the outbreak of the coronavirus pandemic.
Fiscal deficit had widened to 145.5 per cent of the full-year’s Budget Estimates (BE) at Rs 11.58 lakh by December 2020.