Open AccessImpact of Covid-19 on the Indian Economy
Author(s) -
Ila Patnaik,
Rajeswari Sengupta
Publication year - 2020
Publication title -
indian public policy review
Language(s) - English
Resource type - Journals
ISSN - 2582-7928
DOI - 10.55763/ippr.2020.01.01.004
Subject(s) - economics , government revenue , covid-19 , fiscal deficit , stimulus (psychology) , tax revenue , revenue , fiscal policy , monetary economics , pandemic , government (linguistics) , macroeconomics , economy , economic policy , finance , medicine , psychology , linguistics , philosophy , disease , pathology , infectious disease (medical specialty) , psychotherapist
Issue: Sep-Oct 2020
Amidst the economic slowdown triggered by the outbreak of the COVID-19 pandemic in India there have been many demands for the government to announce a large fiscal stimulus to support the economy. Economic growth and tax revenues remain uncertain in 2020-21 making it challenging for the government to finance any addition to the fiscal deficit. In this paper we work out alternative scenarios of fiscal deficit for 2020-21. We find that in our baseline scenario, assuming a 5% contraction in real GDP and a 14.4% contraction in net tax revenue, fiscal deficit of the central government will be 6.2% of GDP. JEL: E6, H2, H5, H6