Covid Financial Stimulus
WILL THE FINANCIAL STIMULUS REACH NEEDY AND REVIVE ECONOMY? Lot of home work has gone behind Hon'ble Finance Minister’s series of announcements made over five days, each day dedicated to particular sectors. It really brought out the genuine intentions of the government to reach to the needy and also convert the most challenging moments into opportunities for revival. There is an on-going debate that much of the Rs.20 lac cr. stimulus has been passed onto financial players like banks and public financial institutions and the impact on the fiscal budget is minimal. Fiscal Deficit increases when the expenditure is more than the estimates and also when the revenue falls short of the estimates. In the first quarter, India's GDP is expected to be only 45% of the estimates and consequently there will be a huge shortfall in tax revenues (50% comes from direct taxes). However, there is no indication that the expenditure will come down by that level as main co...