Budget 2021 Preview: Expect Limited Fiscal Support: Motilal Oswal 
Nirmala Sitharaman, India’s finance minister, wears a protective mask while speaking during a news conference in New Delhi, India. Photographer. T. NarayanBloomberg

Budget 2021 Preview: Expect Limited Fiscal Support: Motilal Oswal 

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Motilal Oswal Report

The Government of India would present the Union Budget 2021–22 on Feb. 1. As always, expectations are running high. However, the government’s fiscal response in 2020 indicates certain inflexibility and the lack of resources to stimulate the economy.

Although there was no massive fiscal stimulus in CY20--various estimates put it between 1.5% and 2.5% of gross domestic product, of which 0.7% of GDP was on account of food subsidies, which is unlikely to affect the fiscal balance--a significant shortfall in receipts likely led to the doubling of the fiscal deficit to approximately 7% of GDP in FY21 (from the budgeted 3.5%).

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Motilal Oswal Budget Preview 2021.pdf

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