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Centre Think over of Spending 2 lakh Crores to Fight Inflation

Published on May 23, 2022
Current Context: The Central government is planning to spend an additional $26 billion in the 2022-23 fiscal year to tackle rising prices and control multi-year high inflation.
Centre Think over of Spending 2 lakh Crores to Fight Inflation
  • As per recent data, retail inflation rose to an eight-year high in April i.e 7.79% while wholesale inflation rose to at least a 17-year high i.e 15.08%.
  • The recent decision taken by the government on cutting down the prices of petrol and diesel will also impact the revenue of the government which is estimated at around 1 lakh crore.
  • The sudden changes in the scenarios of inflation have happened due to the impact of the Ukraine crisis which leads to an increase in oil and food prices. Not only that Ukraine is also the largest exporter of fertilizers to India which impacts very badly.
  • Apart from that Rs 500 billion additional funds will be needed to subsidize fertilizers, from the current estimate of Rs 2.15 lakh crore.
  • Many experts have calculated that the government needs to borrow additional sums from the market to fund these measures and this could increase the deficit target of 6.4% of GDP for 2022-23.
  • As per the 2022 budget the government has announced to borrow 14.31 lakh crore in the current fiscal year.

Question:

Q.1 What will be the Deficit target set by the government for the fiscal year 2022-23?
a. 6.5%
b. 6.7%
c. 5.1%
d. 6.4%
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