Fiscal position on 2021-22 Budget

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  • Fiscal deficit in BE 2021-2022 is estimated to be 6.8% of GDP and in Revised Estimate (RE) 2020-21 is pegged at 9.5% of GDP – funded through Government borrowings, multilateral borrowings, Small Saving Funds and short-term borrowings.
    • Gross borrowing from the market for the next year to be around 12 lakh crores.
    • Amendment to Fiscal Responsibility and Budget Management Act (FRBM Act) proposed to achieve targeted Fiscal Deficit level.
  • Contingency Fund of India is to be augmented from Rs. 500 crores to Rs. 30,000 crores through Finance Bill.
  • Net borrowing for the states allowed at 4% of gross state domestic product (GSDP) for the year 2021-2022 as per recommendation of 15th Finance Commission (FC). Finance Commission (FC).
    • States expected to reach a fiscal deficit of 3% of GSDP by 2023-24, as recommended by the 15th FC.
  • Fifteenth Finance Commission recommendations:
    • Retaining vertical shares of states at 41%.
    • Funds to UTs of Jammu and Kashmir and Ladakh would be provided by Centre.
    • Rs. 1,18,452 crores have been provided as Revenue Deficit Grant to 17 states in 2021-22, as against Rs. 74,340 crores to 14 states in 2020-21.


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