Former Finance Secretary said, due to the COVID-19 pandemic, the government is likely to face a shortfall of around Rs 10 lakh crore in the FY 21.
In a blog, Garg said the government’s tax and non-tax revenues are likely to decline by around Rs 5 lakh crore, while on the expenditure side additional financing of about Rs 6 lakh crore would be required.
“There is likely to be an additional shortfall of not less than Rs. 10 lakh crores in the financial year 2020-21”, says Garg.
“The only feasible and the least disruptive measure is to monetise this additional deficit and the RBI to meet this financing requirement,” he said.
Elaborating on the fiscal situation, the former finance secretary said that indirect taxes, GST, excise duty on petroleum products and customs will under-perform.