Government's measures to meet the huge fiscal deficit can increase the problems of the middle class
MAY 30 (WTN) - Coronavirus crisis has severely affected India's economy. The ongoing lockdown to stop the spread of Coronavirus infection has brought the country's economic activities to a standstill. Now, nothing is clear as to when the country's economy will be back on the track? In such a situation, the financial data for the financial year 2019-20 has increased the challenges before the government, which the general public may have to bear the burden.
For your information, let' know that the GDP growth rate of FY 2019-20 has come down to 11 years. At the same time, the country's fiscal deficit figure has also reached the highest level of 7 years. That is, in the fiscal year 2019-20, the deficit of the public exchequer has been the highest in the last seven years. Let's know that the fiscal deficit of FY 2019-20 has been more than the government's estimate.
Now, as the fiscal deficit has been more than anticipated, the general public should be ready to bear the burden. In fact, the government takes various measures to meet the fiscal deficit. For example, additional tax on petrol and diesel, etc. At the same time, the government can also try to meet the fiscal deficit by some other methods of taxation. The burden of which may have to be borne by the general public in the end.
That's why because the country's fiscal deficit has increased to 4.6 percent of the GDP in the FY 2019-20, the highest level in seven years. Earlier, the fiscal deficit was 4.9 percent in the financial year 2012-13. The Modi government had projected a fiscal deficit of 3.8 percent for the fiscal year 2019-20. The figures that have come out now are clearly more than the government estimates. In such a situation, it is natural that the government will burden the general public to meet the fiscal deficit.
While the government argues that the fiscal deficit could have been capped at 3.3 per cent, this has been increased by the Kisan Samman Nidhi scheme of Rs 20,000 crore for farmers. Let's know that not only the fiscal deficit but also the revenue deficit has been more than anticipated in the financial year 2019-20. The revenue deficit in FY 2019-20 has been 3.27 percent of GDP, much higher than the government's estimate of 2.4 percent.
Indeed, the fiscal deficit has increased mainly due to reduced revenue collection. And now the government will take loan to meet the fiscal deficit and then repay it with interest. Naturally, the entire burden of the fiscal deficit will ultimately fall on the general public. Now, the lockdown has resulted in the loss of jobs of crores of people in the country and people are in economic crisis, if the government increases the tax burden on the general public to meet the fiscal deficit, then the middle class has to face the most problems.
