In an interview that will come as a shock to most people and will probably be strenuously refuted by the government, one of India’s highly regarded economists has said that this financial year GDP will shrink by 29% whilst the Central government’s fiscal deficit will cross 15%. Speaking 48 hours before the budget, Prof. Arun Kumar, the Malcolm S. Adiseshiah Professor at the Institute of Social Sciences and earlier Professor at Jawaharlal Nehru University, says that his calculations show that in Q1 GDP shrank by 50% and not 23.9% as the government has claimed. In Q2 GDP shrank by 25% and not 7.5% as the government claims. He also says that in both Q3 and Q4 GDP will shrink by 10% each. Prof. Kumar also says that the fiscal deficit of the Central government, inclusive of off-budget items, will be over 15% whilst the combined fiscal deficit of the Central government, state governments and PSUs (what is often called the public sector borrowing requirement) will exceed 20%.
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