Finance Minister Nirmala Sitharaman may set a nominal GDP growth target of between 9.5-10% in the Budget for the year 2020-21. According to a report by news agency IANS, people aware of the matter say that the time for experimenting to set 'optimistic goals' has passed. According to the report, a source said that this year the actual estimate of nominal GDP will be presented. The same sources have informed that the targets related to revenue estimation and fiscal deficit will also be presented very carefully in the forthcoming budget so that it does not appear impossible to achieve. The finance minister wants transparency in the budget figures. She does not want the targets related to tax collection and fiscal deficit to be overly ambitious.
The Prime Minister's Office, which is almost associated with the budget-making process, has asked North Block not to set very ambitious targets related to tax collection and fiscal deficit. It is noteworthy that the target of nominal growth is exaggerated by the efforts of investors, market and rating agencies to present a good picture of the economy. The goals of income tax and indirect tax collection like corporate tax and GST are set on the basis of nominal GDP.
Similarly, to ensure that there is no 'clerical' omission in the budget document, North Block and PMO officials are studying the data related to the economy very closely. Sitharaman may present the Budget for the year 2020-21 on February 1. Her budget is considered to be very important at a time when the first estimates reveal the possibility of actual GDP being 5% in the current financial year. The use of this data proves to be very important in the formulation of next year's budget.