Impact of Covid-19 on Indian economy: An Analysis of fiscal scenarios

Ila Patnaik and Rajeswari Sengupta

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: Amidst the economic slowdown triggered by the outbreak of the Covid-19 pandemic in India's 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 thegovernment 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 realGDP and a 14.4 contraction in net tax revenue, the fiscal deficit of the central government will be 6.2 of GDP.

Keywords: Fiscal deficit; Covid-19; Fiscal projections; Government borrowing; Tax revenue (search for similar items in EconPapers)
JEL-codes: E6 H2 H5 H6 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2020-08
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Impact of Covid-19 on the Indian Economy: An Analysis of Fiscal Scenarios (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2020-026

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