Former finance secretary Subhash Chandra Garg has said the Union Budget 2020-21 of the central government has started falling apart as Coronavirus disease (COVID-19) outbreak situation has struck a huge blow to the economy, and the government may face additional expenditure demand of about Rs 3 lakh crore in the current financial year (FY21). He also said the state governments’ finances have suffered more and they are also demanding support package and the central government will sooner or later will have to address these demands.
Garg has stated that the central government's budgeted expenditure for 2020-21 is Rs 30.42 lakh crore or a little over $400 billion at Rs 75 to a dollar. He noted that there is growing chorus for more fiscal measures for supporting businesses especially small informal businesses and millions of workers rendered jobless by the lockdown of economy. He also said increasing expenditures and declining revenues will push fiscal deficit sharply. He added that revenues are badly hit, demand for petroleum products has almost collapsed, hurting customs and excise revenues.
Referring to the central government's package of Rs 1.7 lakh crore, the former finance secretary said this might require about Rs 75,000-80,000 crore of additional expenditure beyond what was budgeted. He also said that about 30 percent of annual budgeted expenditure is incurred in first quarter, as per the trend, after the government started presenting budget on February 01 in 2017.