Beyond borrowings

Govt must present a credible macroeconomic picture

It was only a matter of time for the Union government to revise the borrowing plan for the current fiscal year. The fact that it stuck to the budgeted borrowing target at the beginning of this fiscal year had surprised many analysts. The spread of Covid-19 and the ongoing lockdown have severely affected economic activity, as indicated by the latest Purchasing Managers’ Index. Contraction in economic activity will directly affect government finances. The government not only needs to spend on containing the spread of the pandemic but has to also support the economy with significantly reduced revenue. Thus, it has