Budget 2021: What will be the growth, spending story in post-pandemic world

The slowertrend of declining investment worsened in the current fiscal year. Investment revival will remain a key challenge in the medium term and will determine the quality and durability of economic recovery. As the current disruption creates space to spend more, the government can lead the revival.

The Budget size has declined as a proportion of the GDP overthe years, but the trend could see a reversal in the current year. However, this could be an aberration, as the government will need to cut the fiscal deficit from next year. The size of government spending in the medium-term will depend on its ability to raise revenues.

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