The actual hit to government finances from the measures announced by Finance Minister Nirmala Sitharaman in the last two days was pegged at Rs 66,500 crore or 0.34 per cent of the GDP by a British brokerage firm Barclays.
Aggregating all the measures, which also include aspects like credit guarantees, Barclays said the government and the Reserve Bank of India (RBI) cumulatively have so far announced measures of over Rs 15 lakh crore, leaving Rs 4.25 lakh crore worth of announcements remaining to hit the Rs 20 lakh crore mark announced by Prime Minister Narendra Modi.
From an “actual fiscal impact” perspective, the moves announced on Thursday focussing on migrants, urban poor and farmers will cost only Rs 11,000 crore, the brokerage said, adding it has so far taken a hit of Rs 66,500 crore only.
“The actual fiscal impact of today’s steps will only be Rs 11,000 crore, which brings the total cost of additional incentives announced to Rs 66,500 crore (0.34 per cent of GDP), accounting for steps taken yesterday as well,” it said.
“This leaves the government with room for another Rs 1.24 lakh crore of incremental spending, on our estimates. We continue to believe the government may end up with a fiscal deficit of close to 6 per cent GDP during FY21,” its analysts said.
It can be noted that some analysts, including house economists at SBI, have been pegging the fiscal deficit to come in at a higher level of over 7.9 per cent as against the budget target of 3.5 per cent due to the massive spending that the government is undertaking.
From a monetary support perspective, the government and the RBI have made announcements of over Rs 15.75 lakh crore, leaving Rs 4.25 lakh crore more of announcements to be done to achieve the PM’s target, it said.
The brokerage said the move to use technological solutions to implement the ‘one nation one ration card’ concept for public distribution system will save money on food subsidies for the government, as it has the potential to plug leakages.