- The real GDP to contract by 6.7% in FY21 and grow by 13.5% in FY22.
- Labour participation rate marginally decreased to 40.5% from 40.9% in the week before.
- Year-on-year GDP growth projected at 1.5% in Q4FY20 (from -7.5% in Q3) and 2.1% in Q1F21.
States’ fiscal at 4.3% of GDP in FY22: India Ratings & Research
On the other hand, India Ratings & Research (Ind-Ra) projected aggregate fiscal deficit of States for FY22 at 4.3% of GDP compared to 4.6 %(Revised) in FY21. In this regard, the agency has revised the outlook on State finances for FY22 from stable to negative.
- It had earlier forecast FY21 fiscal deficit of States to be at 4.5%.
- This revision was made due to severe contraction of 6.1% in the nominal GDP for FY21.
Key Points as per Ind-Ra Projections:
–The aggregate revenue receipt of the States to grow at 8.4% in FY22.
–The revenue deficit of States is estimated at 1.5% of GDP in FY22
–The states’ aggregate debt/GDP to rise to 33.9% in FY22 from 32.8% in FY21.
–The gross market borrowings of states will increase to Rs 8.38 lakh crore in FY22 from Rs 8.2 lakh crore in FY21.
–The net market borrowings will stand at Rs 6.4 lakh crore in FY22, up from Rs 6.8 lakh crore in FY21.
–The nominal GDP to grow 14.5% in FY22.
–The share of capital expenditure (capex) in the total expenditure is projected at 15.5% in FY22 than 10.5% in FY21.
–The Union government financed Rs 5.50-lakh crore to States in FY21 as against the Budget estimate (BE) of Rs 8.03-lakh crore amid economic disruption caused by COVID-19.
The 15th Finance Commission (FC) has submitted its report for the period FY22 to FY26. As per its recommendations, the government in its FY22 Budget has committed to retain the vertical share of States in central taxes at 41%.
Recent Related News:
i.In accordance with the data released by the Controller General of Accounts(CGA), India’s April-November fiscal deficit stood at Rs 10.75 lakh crore at the end of November 2020 which is 135.1% of the Budget Estimate(BE) for FY21, The fiscal deficit at the end of November 2019 had stood at 114.8% of 2019-20 BE.
ii.In accordance with the report by rating agency ICRA (formerly Investment Information and Credit Rating Agency of India Limited), India’s real GDP (Gross Domestic Product) will expand by 10.1% in FY2022 with multi-speed recovery. However in absolute terms India’s GDP will “mildly” surpass the levels of FY20.
Chief Executive Officer (CEO)– Kentaro Okuda
Headquarter– Tokyu, Japan
About India Ratings & Research (Ind-RA)
Managing Director & CEO– Rohit Karan Sawhney
Headquarter– Mumbai, Maharashtra