Consider the following statements regarding the Budget of India:
1) The expenditure proposed for the financial year, 2020-21, is higher than the revised estimated expenditure for the financial year, 2019-20.
2) The assumed nominal Gross Domestic Product (GDP) growth rate for the financial year, 2020-21, is lower than the nominal GDP growth rate estimated for the financial year, 2019-20 .
Of these statements:
A. Only 1 is correct
B. Only 2 is correct
C. Both 1 and 2 are correct
D. Neither 1 nor 2 is correct
Please scroll down to see the correct answer and solution guide.
Right Answer is: C
SOLUTION
As per the Indian Union Budget Analysis, 2020-21, the government proposed to spend Rs 30,42,230 crore in 2020-21, which is 12.7% higher than the revised estimate of that for the financial year, 2019-20.
The government has assumed a nominal GDP growth rate of 10% (i.e., real growth plus inflation) in
2020-21. The nominal growth estimate for 2019-20 was 12%.