A steep fiscal correction

With modest revenue effort, the burden of cutting the deficit will fall on a big expenditure contraction

About 10 days ago, the Union Budget for 2021-22 was presented to Parliament and it instantly made headlines for its bold announcements on privatisation, asset monetisation and transparent accounting of the government’s fiscal deficit. It is now time to take a closer look at the key numbers underlying the government’s projections on revenue and expenditure. Do the actual numbers bear out the claims made by the government or do they suggest something else?

The first question arises from the road map for fiscal consolidation given in the Budget. After conceding a huge increase in fiscal deficit at 9.5 per cent of