Decoding Budget 2020: Nirmala Sitharaman's fiscal maths gone awry

Slowdown in economic growth has taken a clear toll on revenue growth

Finance minister Nirmala Sitharaman presented an ambitious Budget for 2020-21 last weekend, but the impact of economic slump was visible in the fine print. Let us see through this, step-by-step, to understand how the Budget math was worked out. 

The overall spending in 2019-20 was curtailed by nearly Rs 90,000 crore in comparison to the expected spending. This happened despite the fact that fiscal deficit was raised from 3.3 per cent of gross domestic product (GDP) to 3.8 per cent, showing that deficit widened during a fiscal contraction, a big worry (Chart 1). 

Slowdown in economic growth has taken a clear toll