PPT: Economic Survey- 1 Notes | EduRev

Indian Economy for UPSC CSE

UPSC : PPT: Economic Survey- 1 Notes | EduRev

 Page 1


Economic Survey 
2019-20
Volume 2 Chapter 2 
“Fiscal Developments”
Page 2


Economic Survey 
2019-20
Volume 2 Chapter 2 
“Fiscal Developments”
Budget(Article 112)
Revenue Account Capital Account
Expenditure Receipts
Tax Non-Tax
Receipts Expenditure
Debt  
Creating
Non-Debt 
Creating
Page 3


Economic Survey 
2019-20
Volume 2 Chapter 2 
“Fiscal Developments”
Budget(Article 112)
Revenue Account Capital Account
Expenditure Receipts
Tax Non-Tax
Receipts Expenditure
Debt  
Creating
Non-Debt 
Creating
Goals of 
Fiscal Policy
Allocation of ‘public goods’
Redistribution of national 
income through taxation 
and govt spending
Stabilisation of the 
economy through 
countercyclical measures
Keynes
Page 4


Economic Survey 
2019-20
Volume 2 Chapter 2 
“Fiscal Developments”
Budget(Article 112)
Revenue Account Capital Account
Expenditure Receipts
Tax Non-Tax
Receipts Expenditure
Debt  
Creating
Non-Debt 
Creating
Goals of 
Fiscal Policy
Allocation of ‘public goods’
Redistribution of national 
income through taxation 
and govt spending
Stabilisation of the 
economy through 
countercyclical measures
Keynes
Introduction
Amongst the various reforms initiated by the government to promote 
growth and investment, reduction in “Corporate Income Tax” rate was 
a major structural reform. 
Fiscal policy 2019-20 was characterised by a sluggish growth in tax 
revenue relative to budget estimates. 
The non-tax revenue showed considerable higher growth during the 1st 
8 months of this financial year compared to same period last year. 
Total expenditure has increased at a considerable pace during April-
November period of 2019-20, with Capital expenditure growing at 
roughly 3 times the rate at which it was growing during the same 
period of last year. 
Going forward, considering the urgent priority of the government to 
revive growth, the “fiscal deficit” target has to be relaxed for the 
current year.
Page 5


Economic Survey 
2019-20
Volume 2 Chapter 2 
“Fiscal Developments”
Budget(Article 112)
Revenue Account Capital Account
Expenditure Receipts
Tax Non-Tax
Receipts Expenditure
Debt  
Creating
Non-Debt 
Creating
Goals of 
Fiscal Policy
Allocation of ‘public goods’
Redistribution of national 
income through taxation 
and govt spending
Stabilisation of the 
economy through 
countercyclical measures
Keynes
Introduction
Amongst the various reforms initiated by the government to promote 
growth and investment, reduction in “Corporate Income Tax” rate was 
a major structural reform. 
Fiscal policy 2019-20 was characterised by a sluggish growth in tax 
revenue relative to budget estimates. 
The non-tax revenue showed considerable higher growth during the 1st 
8 months of this financial year compared to same period last year. 
Total expenditure has increased at a considerable pace during April-
November period of 2019-20, with Capital expenditure growing at 
roughly 3 times the rate at which it was growing during the same 
period of last year. 
Going forward, considering the urgent priority of the government to 
revive growth, the “fiscal deficit” target has to be relaxed for the 
current year.
The MTFP statement presented with the budget of 2019-20, pegged the FD target 
for 2019-20 at 3.3% of GDP. 
This is expected to follow a gradual path of reduction and reach 3.0% in the 
year 2020-21, and continue at the same level in 2021-22. 
It was further projected that Central Government’s liabilities(Debt) will 
gradually come down. 
This declining debt trajectory was expected based on a stable inflation regime 
and declining FD.
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