'It is imperative to augment disposable incomes of households.'
Although it is widely feared that India’s fiscal deficit could reach around 7.5% of GDP given the dislocation of the economy during the pandemic, analysts assess that the budgetary shortfall will be much lower than the consensus. "We see that government has largely curtailed spending so far this year, when compared with the budgeted estimate of ₹30 trillion. We also do not see any spurt in spending during the remaining part of the fiscal year, considering that supply and demand side of the equation has started recalibrating and the economy is gaining traction. Though FY21 Govt Revenues are expected to contract 10%, expenditure growth will be relatively flat. As a result, we see a fiscal deficit of 11.9 trillion or 6.1% of GDP," says Yes Securities.