Economic Survey- Fiscal Developments

F i s ca l S t rate g y s i n c e C o v i d Pa n d e m i c

F i sca l Pe r fo r m a n ce i n 2 0 2 1 -2 2
E v o lut i o n o f D i s i n v e st m e nt Po lic y o f I n d ia

R efo r m s to I n cre a se G o ve r n m e nt R e ve n u e s
 F i s ca l S t rate g y s i n c e C o v i d Pa n d e m i c

1. Safety Nets Agile response Direct Benefit Transfer

2. Stimulus Packages demanded immediate (DBT)
safety nets for the Emergency credit to
vulnerable Small businesses
Food Subsidy
To Stimulate Supply
& Demand in the
Economy

Production Linked Incentive National Infrastructure Pipeline

(PLI) Scheme Credit Guarantee scheme
Encourage Investment in Export Boosting scheme
Infrastructure
Enhance Capital Expenditure by
central & state government
 W h y E n h a n c e C a p ita l E x p e n d it u r e ? ?

To Stimulate Supply
& Demand in the
Economy

Production Linked Incentive

(PLI) Scheme
Encourage Investment in
Infrastructure
Enhance Capital Expenditure by
central & state government
 A g i le R e s p o n s e a n d S t i m u lu s s i n ce Pa n d e m i c

Immediate
response PM-KISAN Credit
DBT Guarantee
 A g i le R e s p o n s e a n d S t i m u lu s s i n ce Pa n d e m i c

Capital Food
Expenditure Subsidy
DBT
A g i le R e s p o n s e a n d S t i m u lu s s i n ce Pa n d e m i c
A g i le R e s p o n s e a n d S t i m u lu s s i n ce Pa n d e m i c
F i s ca l S t rate g y s i n c e C o v i d Pa n d e m i c

F i sca l Pe r fo r m a n ce i n 2 0 2 1 -2 2
Fiscal Pe rfo r m a nce
Fiscal Pe rfo r m a nce
Fiscal Pe rfo r m a nce - Reve n u e s
F i s ca l P e r f o r m a n c e - R e v e n u e s & E x p e n d it u r e s
 Tr e n d s i n R e c e i pt s o f t h e G o v e r n m e n t

Non debt receipts Tax revenue, non tax revenue, loan recovered,
disinvestment receipts

Debt receipts Market borrowings, other liabilities

Ta x R e v e n u e
Ta x R e v e n u e
R i s i n g M o nt h ly G S T co l le ct i o n
 N o n Ta x R e v e n u e

Major contribution
by dividends and
profits à 0.99 lakh
crore surplus
transferred by RBI
to CG
 N o n D e b t C a p ita l R e c e i pt s

Non debt receipts Tax revenue, non tax revenue, loan recovered,
disinvestment receipts

To be covered later in disinvestment policy of

India since Independence
 D e b t R e c e i pt s

Debt receipts Market borrowings, other liabilities

Public debt- 90% of total

liability
Public account liability =
national small savings
fund, state provident
funds, reserve funds,
deposits = 10%

Low reliance on External

debt = low currency and
interest rate risk

Low issuance of short

term bonds = low roll
over risk
 R i s i n g D e b t to G D P rat i o

Debt receipts Market borrowings, other liabilities

 We i g hte d A v e ra g e co st o f B o r r o w i n g - U n d e r co nt r o l

What objectives Cost minimization, risk mitigation and market

are to be kept in development
mind while
borrowing?
 R e ta i l D i r e c t S c h e m e

Purpose of RDS Channelise savings of middle class, small

businessmen, senior citizens etc directly into
risk free G-secs

Boost Financial Inclusion, broaden Investor

Base
 E x p e n d it u r e Tr e n d s

Revenue Expenditure
 E x p e n d it u r e Tr e n d s

Subsidies
 E x p e n d it u r e Tr e n d s

Trend in capital
Expenditure
 E x p e n d it u r e Tr e n d s

Comparison

Capital Expenditure =
2.2% of GDP
E v o lut i o n o f D i s i n v e st m e nt Po lic y o f I n d ia

R efo r m s to I n cre a se G o ve r n m e nt R e ve n u e s
 E v o l u t i o n o f I n d i a ’s D i s i n v e s t m e n t P o l i c y

Constitution 1st 1953- Air 1956- Nationalisation of

Amendment Act Corporations Act- Life Insurance- LIC Act
1951- nationalisation nationalisation of 1956
of private firms Airlines
became standard
policy
1969- nationalisation of 14
banks

Disinvestment term Coal Mines 1972- General Insurance

used in Budget 1991 nationalised in 1971- Business nationalisation
75 act
 E v o l u t i o n o f I n d i a ’s D i s i n v e s t m e n t P o l i c y

Department of Turned into a “Strategic sale” of state

Disinvestment ministry on owned companies started
created in 1999 disinvestment in getting Discussed
2001

Strategic- Strategic
Atomic energy, Disinvestment
space, defence approved since 2016
Telecom and
transport
Power, petroleum,
Classification of Public
coal and minerals New Public sector
sector commercial
Banking, Enterprise policy 2021 for
insurance, enterprises into strategic
and non strategic Atmanirbhar Bharat
financial services
 A s s et M o n et i z at i o n

Infrastructure need We need Money- Meaning of asset

of India- Rs 111 lakh Monetization of monetization?
crore between 2020- assets can provide
25 15-17%
Along with
development financial
institutions (long • PPP concessions
term loans) • Using capital
market
instruments to
raise money-
Infrastructure
Monetization – raise Monetization of core
Investment Trusts
the value of assets- NITI Aayog
government assets Monetization of non core
and unlock their assets- DIPAM
value
E v o lut i o n o f D i s i n v e st m e nt Po lic y o f I n d ia

R efo r m s to I n cre a se G o ve r n m e nt R e ve n u e s
 R efo r m s to I n cre a se G o ve r n m e nt R e ve n u e s

Measures on Tax Measures to boost

Direct Tax measures
Evasion investment

Ease of compliance
for taxpayers
through voluntary
TDS on several new • Removal of
transactions like retrospective
compliance, e-filing
huge cash taxation
portal
withdrawal, foreign • Encourage foreign
remittance, car inv in SWFs and
Faceless procedure to purchase, e- pension funds
promote transparency commerce • Tax incestives for
participants, buying units located in
immovable property IFSC