How the pandemic crunched state budgets in India
- In contrast to the expansionary stance of the Union government, state governments seem to have taken a much more conservative approach in planning their budgets this year, a Mint analysis shows
Even as governments across the world opened up their purse strings last year to deal with the fallout of the covid-19 pandemic, the Indian government practiced austerity. On 1 February this year, the Union government finally shifted its stance, announcing an expansionary budget, with a focus on raising capex spend in the last quarter of fiscal 2021. The spending plan for fiscal 2022 represents only a modest hike over the previous fiscal year but the plan still involves an ambitious borrowing program that will push the fiscal deficit levels much beyond earlier thresholds.