In FY21, India’s real GDP contracted 7.3 per cent marking the worst fall in the past seven decades.
“Our calculations suggest that while real spending by the private sector fell 10 per cent in FY21, government spending grew 2 per cent in real terms.”
Consequently, while the private sector deducted 8.7 percentage points from the real GDP growth, the government added 0.3pp in FY21.
“Of this, real government investments declined for the second consecutive year, while real consumption grew 2.9 per cent YoY in FY21.”
Besides, it cited that combined fiscal deficit was at an all-time high of 13.3 per cent of GDP in FY21.
“This was the highest fiscal deficit seen in the past three decades.”
Furthermore, based on the provisional data of 18 states, it said: “Out calculations suggest the total spending by the states grew 5.8 per cent in FY21, following growth of 3 per cent FY20 – the slowest in three decades.”
“Notably, states’ spending growth has been below 6 per cent three times in the last four years, vis-a-vis the pre-GST lowest growth of 7.2 per cent in FY02.”
In addition, it said that states’ fiscal deficit was at a 17-year high in FY21.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.