Budget to offer more fiscal support to economy amid Covid surge: Report

The rising uncertainty from the third wave of the pandemic will force the forthcoming Budget to push the fiscal pedal more to support the fragile recovery, and print in 6.5 per cent fiscal deficit as the government is likely to budget for around Rs 42 lakh crore of capex next fiscal, says a brokerage report.

Budget 2021 had pegged the fiscal deficit at 6.8 per cent or Rs 12.05 lakh crore for FY22, down from 9.5 per cent in FY21 when also it had borrowed Rs 12 lakh crore but in percentage terms it soared given the massive 7.3 per cent contraction of the economy in the year.

The FY21 deficit jumped after government in May 2020 raised its gross market borrowing target for the fiscal to Rs 12 lakh crore from Rs 7.8 lakh crore budgeted in February 2020 after the pandemic scuppered all the budgetary numbers.