This is the time of year when optimistic budget projections tend to turn out to be wrong, tax revenues fall short of expectations, austerity measures are ordered for government agencies, government taxes and investments are postponed for lack of funds and budget funds of all kinds are tried, and the budget deficit is close to Keep budget target. But not this year. Thanks to a booming economy, tax revenues have risen above all expectations and the budget deficit has collapsed.
The economy has recovered strongly from the traumatic April-June quarter when the second wave of Covid caused lockdowns and shutdowns. The budget forecasts looked far too optimistic at the time. The RBI lowered its GDP growth forecast for the year from 10.5% to 9.5% and the IMF lowered its forecast from 12.5% to 9.5%.
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