Union Budget 2020-21: Are the fiscal targets realistic?
Distilled Policy Brief
- The actual monthly receipts and expenditure accounts of the central government are maintained by the Controller General of Accounts (CGA), while the final actual numbers are audited by the Comptroller and Auditor General of India (CAG) and presented to Parliament two years after the initial estimates.
- For the financial year 2019-20, a lower nominal GDP growth of 7.5% compared to the budgeted 12% impacted tax collections, leading to declines in corporation tax (-14%), customs (-12%), and union excise duties (-2%) during April-December 2019.
- By December 2019, the government had met 78% of its revised expenditure target (spending Rs 21.1 lakh crore) but generated only 61% of non-borrowing receipts (Rs 11.8 lakh crore), requiring a steep 41% growth in receipts in the final quarter to meet revised estimates.
🎯 Prelims High-Yield Examination Points
Differences in the constitutional and administrative roles of the Comptroller and Auditor General (CAG) and the Controller General of Accounts (CGA) in government accounting and auditing.
⚖️ Mains Analytical & Syllabus Linkages
Analyzing the challenges of optimistic fiscal targeting, tax revenue shortfalls, and the impact of nominal GDP growth deceleration on fiscal consolidation.
🎯 UPSC Prelims Practice Drill
With reference to the fiscal administration and accounting of the Union Government in India, consider the following statements: 1. The monthly actual accounts of receipts and expenditures of the Central Government are maintained by the Controller General of Accounts (CGA). 2. The final actual financial figures of the Central Government are audited by the Comptroller and Auditor General of India (CAG) before being presented to Parliament. 3. A lower nominal GDP growth rate compared to the budgeted estimate generally leads to an increase in direct taxes like corporation tax and indirect taxes like customs duties. Which of the statements given above are correct?
- [A] 1 and 2 only
- [B] 2 and 3 only
- [C] 1 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statements 1 and 2 are correct: The Controller General of Accounts (CGA) maintains the actual monthly receipts and expenditure accounts of the central government, while the final actual numbers are audited by the Comptroller and Auditor General of India (CAG) and presented to Parliament. Statement 3 is incorrect: A lower nominal GDP growth rate (such as 7.5% instead of the budgeted 12% in 2019-20) negatively impacts tax collections, leading to declines in corporation tax, customs, and union excise duties.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.