NEW DELHI: The Union budget gives two separate figures for nominal GDP growth in FY20, a key input that is used to estimate tax collection based on historical buoyancy.

“Budget at a glance”, summary of the budget, projects a nominal GDP growth of 12% for FY20, estimating the GDP at current prices at `211 lakh crore for the year. The “medium term fiscal policy cum fiscal policy strategy statement”, also presented with the budget, pegs the nominal GDP growth at 11%. “Nominal Gross Domestic Product for 2019-20 is expected to be Rs 2,11,00,607 crore which indicates a growth of 11% of previous year,” it says.

The right nominal GDP growth is 11%, not 12% as presented in “budget at a glance”, which also assumes Rs 211 lakh crore nominal GDP for FY20.

Its growth estimate is higher by one percentage point as it has got the nominal GDP for FY19 wrong. It says the estimated GDP for FY19, according to revised estimate, is `188.4 lakh crore, which yields a 12% growth. The actual nominal GDP, according to provisional estimate released by statistics office on May 31, was Rs 190.1 lakh crore, which yields the right nominal GDP growth rate of 11%. The Rs 188.4 lakh crore estimate, used in interim budget for FY20, came from first advance estimate presented on January 7, which has since been updated.


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