Finance minister Sitharaman to address post-Budget RBI board meeting
- The meeting will be held virtually this year due to the ongoing Covid-19 pandemic.
Finance minister Nirmala Sitharaman will hold the post-Budget meeting of the RBI's central board on Tuesday where she will outline the main points of the Union Budget 2021-22 and also discuss the roadmap to fiscal consolidation.
The nation’s fiscal deficit is expected to hit a record high of 9.5% of the Gross Domestic Product (GDP) in the current fiscal which will end on March 31 due to Covid-19 pandemic. Fiscal deficit is the excess of government spending over its revenues.
It was pegged at 6.8% of the GDP for the 2021-2022 fiscal year. The meeting will be held virtually this year due to the ongoing Covid-19 pandemic.
Earlier this month, RBI governor Shaktikanta Das had said that the central bank will be able to keep up with the high quantum of government borrowing at ₹12 lakh crore for the upcoming fiscal in a "non-disruptive" manner. He had also said the ongoing Covid-19 situation had resulted in deviation from the fiscal consolidation roadmap.
A wider deficit generally means larger borrowing by the government. As per the Fiscal Responsibility and Budget Management (FRBM) Act mandate the government was committed to getting the fiscal deficit down to 3 per cent in the medium term.
The finance minister will also discuss the announcements made during the budget and discuss how to revive growth by increasing the spending on infrastructure and focusing on the needs of the healthcare sector. The economy is expected to contract by 7.7% in the current fiscal year ending in March. The real GDP growth is expected to remain between the range of 10-10.5%, according to a report by news agency PTI.
The Union Budget saw a rise in spending on capital expenditure to ₹5.54 lakh crore from ₹4.12 lakh crore. Expenditure on healthcare has also been hiked from ₹94,000 crore to ₹2.23 lakh crore in the Union Budget.