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Despite shifting geopolitical realities around the world, the Indian economy is expected to
grow by 7.1-7.6 percent this fiscal year, according to a study released on Wednesday. India
has experienced significant insecurity as a result of changing foreign scenarios such as the
Ukraine war. Morgan Stanley believes that India's worst period of macroeconomic turbulence
is coming to an end. Retail inflation is expected to be 7-7.2 percent in August 2022 and to
remain there in September 2022 before declining gradually.
Capital Expenditure: Asset Creation and Capital Expenditure Asset creation is linked to
capital expenditure. This is the cost of purchasing tangible assets such as real estate,
buildings, machines, and other physical infrastructure. Capital expenses also include
disbursements, which include repayment of the government's debt as well as loans and
advances to other organisations.
In the midst of a pandemic situation, the government's flexible fiscal policy response
included a change in the mix of stimulus measures. During the early stages of the
epidemic, the fiscal strategy was centred on creating safety nets for society's most
vulnerable and underprivileged members in order to protect them from the worst-case
scenarios. Stimulus measures that ensured the provision of necessities, such as direct
benefit transfers to the most vulnerable groups, emergency financing to small
businesses, and the world's largest food subsidy programme, made the development of
safety nets possible. Then, from 2020 to 21st, a series of stimulation programmes
were implemented, each one guided by a Bayesian updating of information as the
situation changed.
Building on the same methodology, the Union Budget 2021-22 increased budget
outlays for more productive capital expenditure. To maintain its focus on the National
Infrastructure Pipeline, the government budgeted a 34.5% increase in capital
expenditures for 2020-21 BE, with a focus on railways, highways, urban
transportation, power, telecom, textiles, and affordable housing. The National
Infrastructure Pipeline, which previously covered 6835 projects, was expanded to
7400 projects in the budget for 2021-22. PLI initiatives for 13 sectors were introduced
in Budget 2021-22, with an outlay of '1.97 lakh crore, for a five-year period beginning
in 2021-22, in order to harness domestic manufacturing potential across sectors such
as renewable energy, heavy industry, agricultural, automotive, and textiles.
This increased emphasis on capital spending in the second half of the 2020-21 fiscal
year reflects the Indian government's responsive fiscal policy in response to COVID-
19. Because of mobility restrictions in containment zones and the refusal or inability
of contractors and personnel to complete the work, quarterly capital spending was
constrained during the first two quarters of 2020-21. Capital spending was increased
in Q3 of 2020-21 to encourage investment in industries with the greatest economic
impact. Travel and health-related restrictions were relaxed. Given the increase in
capital expenditures during the first three quarters of fiscal 2021-2022, the emphasis
on capital spending has remained.
In terms of Revenue
In contrast to the 9.6 percent increase predicted in the 2021-22 Budget Estimates,
revenue receipts have increased by 67.2 percent year over year, according to the
2021-2022 Economic Survey. According to the table below, the Central Government's
financial situation improved between April and November 2021 as a result of
increased revenue collection and capital expenditure spending allocations. Revenue
increased significantly faster in the last fiscal year (April to November 2021) than it
did in the previous two years. This achievement is due to significant growth in both
tax and non-tax revenue. Firms' increasing profitability, the formalisation of the
economy, and improved compliance as a result of tax changes are a few of the factors
that could have contributed to this increase in corporate tax collection. According to
the RBI, the industrial sector's gross earnings increased by 132.5 percent during the
first quarter of 2021-2022, while the IT sector's increased by 21.5 percent.
Manufacturing sector gross profits increased by 39.7% in the following quarter, Q2 of
2021-2022, while IT sector gross profits increased by 18.4%. The Indian
government's recent implementation of a number of tax administration and policy
reforms has also contributed to the increase in compliance.
Over the first eight months of the previous fiscal year, indirect tax revenue increased
by 38.6%. As a result of the manufacturing sector's recovery and consumer demand,
an increase in imports of goods and services has resulted in an increase in customs
collection. Customs revenue increased by more than 65% from April to November
2021 compared to April to November 2019 and by nearly 100% compared to April to
November 2020. Excise duty revenue increased by 23.2% year on year between April
and November 2021.
With the economy picking up, the GST has become a significant source of revenue
for both the federal government and state governments. The Centre's GST receipts
from April through November 2021 made up 61.4% of the Budget Estimate. Center
and State gross GST collections from April to December 2021 was 10.74 lakh crore,
up 61.5 percent from April to December 2020 and 33.7 percent from April to
December 2019.
In terms of Expenditure
Budget at a Glance
Last 5 years
(In ₹ crores)
of capital assests
13. On Capital Account 426317 554236 602711 750246
14. Effective Capital Expenditure (12+13)³ 657182 773348 840396 1067889
The facts presented here provide an overview of the Indian Union Budget from 2017-2018 to
2021-2022. When we look at the expenditure trajectory year over year, we can see that it has
risen. Spending for the 2018-2019 fiscal year increased by 14.04% over the previous fiscal
year. The government of India (GOI) has prioritised the growth of a number of industries,
including agriculture, rural development, defence, and the subsidiary industries of food and
fertilisers, where it has made the most investments. There were two deadly lockdowns in
2020 and 2021, which disrupted India's economy. The immunisation drives posed the greatest
challenge to the Indian government in 2021. As a result, we can see a 14.5% increase in
spending and a significant reduction in production and immunisation campaigns throughout
India.
Centre's Expenditure
Establishment Expenditure 570244 609585 598672 609014
Central Sector Schemes/Projects 757091 831825 1263690 1051703
Source: https://www.indiabudget.gov.in/budget2021-22/index.php
3. CAPITAL RECEIPTS
A. Non-debt Receipts 68620 224967 46497 188000
(i) Recoveries of loans and advances@ 18316 14967 14497 13000
Source: https://www.indiabudget.gov.in/budget2021-22/index.php