Vijay Kelkar, who headed the committee on tax reforms, on Tuesday warned that higher economic growth and foreign direct investment flow could not be achieved without hard fiscal reforms.
Two important features are Effective Revenue Deficit and Medium Term Expenditure Framework.
There are various estimates of India's debt to GDP ratio, but the consensus is that that it would be over 80 per cent at the end of the current fiscal year.
There is no direct impact of the Russia-Ukraine crisis on India in terms of bilateral trade but a surge in oil prices poses considerable risk to the economy, an analyst report said on Friday. International oil prices which have surged past $100 per barrel "pose risks to external stability and currency movement," a Bank of Baroda Economics Research report said. Russia has launched military operations against Ukraine, stoking fears of significant disruption in the region, including loss of life. The West is ramping up financial sanctions against Russia and support for Ukraine.
Ahead of the Budget, global rating agency Standard and Poor's has warned India may not be able to achieve the fiscal responsibility and budget management target of axing fiscal deficit and projected a lower growth of 6 per cent this fiscal.
"We are on track to bring down fiscal deficit to 3.3 per cent this year and to three per cent in the next year and hopefully remove revenue deficit in 2008-09", Finance Secretary D Subbaro said while speaking at the launch of the OECD economic survey of the Indian economy in New Delhi on Tuesday. The Fiscal Responsibility and Budget Management Act requires the government to reduce fiscal deficit to three per cent of the GDP and eliminate revenue deficit by 2008-09.
Finance Ministr Arun Jaitley will have to do a balancing act to manage fiscal prudence.
Bharti Airtel made part payment of Rs 4,725 crore.
He did not believe in any fiscal puritanism. In 2012, when it was almost certain that the government will breach the 2012-13 fiscal deficit target, he wrote that in abnormal times, abnormal measures are required to get back to normalcy.
Amid demands for snapping trade ties with China for its transgressions on the border, former Niti Aayog vice chairman Arvind Panagariya has opined that cutting trade with Beijing at this juncture would amount to sacrificing India's potential economic growth. Instead, Panagariya suggested that India should try to enter into free trade agreements (FTA) with countries such as the UK and the European Union to expand its trade. "Engaging China in a trade war at this juncture will mean sacrificing a considerable part of our potential growth... purely on economic grounds, it will be unwise to take any action in response to it (transgressions on the border)," the eminent economist told PTI.
Former Niti Aayog Vice Chairman Arvind Panagariya has opined that cutting trade with Beijing at this juncture would amount to sacrificing India's potential economic growth.
Making a case for an optimal fiscal stance, the Economic Survey on Friday said growth leads to debt sustainability and not necessarily vice-versa. "This is because debt sustainability depends on the 'Interest Rate Growth Rate Differential' (IRGD) i.e. the difference between the interest rate and the growth rate in an economy. "With the Indian context of potential high growth, the interest rate on debt paid by the Indian government has been less than India's growth rate by norm, not by exception," it said.
Expressing his satisfaction over the government's move to slash fiscal deficit target, Das said it will help improve investment by the private sector as crowding out impact will be less.
The Centre will take a hit of Rs 26,000 crore (Rs 260 billion) in 2005-06 by implementing the twelfth finance commission's proposal of a higher share of central taxes, grant and debt relief to states.
Among other things, the agenda is likely to focus on increasing private investment, employment generation and giving relief to the farm sector
If the government cuts wasteful expenditure as it is trying now, the deficit would at most fall to 8 per cent, not less than that.
The Indian economy appears to have slowed down in 2018-19 due to lower private consumption, tepid growth in fixed investment and muted exports, a finance ministry report has said.
The games began a few months ago, when the finance ministry and the Planning Commission got into their well-publicised spat.
'The finance ministry's decision to accept the deficit target of 4.5 per cent in 2025-2026 appears to have emanated from its endorsement of the Finance Commission's view that the Indian economy will continue to remain impacted by the pandemic, adversely undermining its growth potential,' notes A K Bhattacharya.
The tug of war between the finance ministry and the Planning Commission over more resources for plan projects worsened, with Planning Commission Deputy Chairman Montek Singh Ahluwalia saying he was keen on getting more money for the 11th Plan.
For fiscal year FY23, the 2022 Union Budget had targeted a capex outlay of Rs 7.5 trillion, which is 35.4 per cent higher than the FY22 Budget Estimate of Rs 5.54 trillion.
Sri Lankans queued up to apply for fresh passports outside the department of immigration and emigration office in Colombo.
In an accompanying vision statement, the former finance minister highlighted his track record of serving in the Cabinet, helping to steer the economy through the toughest of times with the COVID pandemic.
Addressing a public meeting after unveiling a 125 ft-tall statue of B R Ambedkar here, KCR said the BRS party was getting a tremendous response from Maharashtra and was expecting a similar reaction from West Bengal, Bihar, and Uttar Pradesh.
Driven by strong demand, the overall passenger vehicle dispatches crossed 3.35 lakh units in February as automakers, including Maruti Suzuki India, Hyundai, Tata Motors and Mahindra & Mahindra, reported robust sales during the month. The dispatches of more than 3.35 lakh units last month marked an 11 per cent over February 2022. It was also the highest ever overall wholesales in the month of February. The country's largest carmaker Maruti Suzuki India on Wednesday said its domestic wholesales rose 11 per cent to 155,114 units in February as compared with 140,035 units in the same month last year.
With nearly 100 countries closing national borders during the past month, the movement of people and tourism flows have come to a screeching halt. The contraction could be even higher if governments fail to provide income support and help boost consumer spending.
After a contraction in the current financial year, India's economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said on Wednesday. The coronavirus pandemic will lead to shrinking of the already slowing economy in 2020-21 that started in April. Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing financial year.
There are several welcome standalone reforms, but these do not add up to a coherent strategy to achieve a $5 trillion economy or secure Aatmanirbharta, observes Rathin Roy.
The Union Budget for 2004-05, which is being viewed as a "litmus test" for the Congress-led government, may unveil the roadmap for wiping out revenue deficit well in advance by 2007 and a subsequent reduction in fiscal deficit to manageable limits.
Finance Minister P Chidambaram said revenue deficits would have to be wiped out first in the economy.
Economy is expected to grow by 7.2 per cent in 2005-06, a notch higher than Reserve Bank of India's estimate of 7.0 per cent
Just 14 companies raised Rs 35,456 crore through main-board primary share sales in the first half of the fiscal, down 32 per cent from the year-ago period when 25 issues had mopped up Rs 51,979 crore. But according to Prime Database, the IPO pipeline is strong with 71 issues worth Rs 1,05,000 crore having Sebi approvals and another 43 worth about Rs 70,000 crore are awaiting approval. Of these 114 planned issues, 10 are new-age tech companies, which are looking to raise roughly Rs 35,000 crore.
Ahead of the Budget, the government has achieved almost half the divestment target of Rs 65,000 crore. FY23 divestment receipts are unlikely to be anywhere close to the budgeted target.
Booming manufacturing and services sector is likely to push up India's GDP growth to 7.7 per cent in 2006-07, but inflationary pressure may lead to hike in interest rates
Chief Election Commissioner Nasim Zaidi has written to Cabinet Secretary P K Sinha who is likely to consult the parliamentary affairs ministry before framing his response on the government's plans to advance the budget presentation to February 1, sources said.
'I want us not to underestimate Indian voters. They can tell good work from bad.'
This is a moment when the leaders at the Centre and states must show true leadership for the sake of the country. And it is the top political leaders, not attorney generals or bureaucrats, who should be sitting together and settling this thorny issue of compensation, says Arvind Subramanian, former Chief Economic Adviser to the Government of India.
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