'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 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.
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.
'I want us not to underestimate Indian voters. They can tell good work from bad.'
The games began a few months ago, when the finance ministry and the Planning Commission got into their well-publicised spat.
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.
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.
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.
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.
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.
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.
Whether this remains under control in the coming months will depend on the future intensity and spread of the Russia-Ukraine war, and the effectiveness of the Indian government's response, points out A K Bhattacharya.
India's Gross Domestic Product (GDP) is expected to expand by 9.2 per cent in the current financial year, according to the Economic Survey 2021-22 tabled in the parliament on Monday. "Advance estimates suggest that the Indian economy is expected to witness real GDP expansion of 9.2 per cent in 2021-22 after contracting in 2020-21. "This implies that overall economic activity has recovered past the pre-pandemic levels," Economic Survey noted. Almost all indicators show that the economic impact of the "second wave" in Q1 was much smaller than that experienced during the full lockdown phase in 2020-21 even though the health impact was more severe, it said.
'The robust tax collections give the finance minister a fair amount of headroom for an expansionary fiscal policy.'
In a sudden development, the Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), which markets its products under the brand name 'Amul', on Monday ousted its long-serving Managing Director R S Sodhi but did not give any reason. However, Sodhi said he had requested the federation's board to relieve him of his duties. The federation's chief operating officer Jayenbhai Mehta has been given the interim charge of the managing director (MD).
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.
What's different this time is that global financial stress -- which has its genesis in four policy choices made in recent years -- is juxtaposed with a more resilient real economy, observes Sajjid Z Chinoy, chief India economist at J P Morgan.
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.
There has been a decline in foreign direct inflow from China in the last three years, with FDI coming down to USD 163.77 million in 2019-20, Minister of State for Finance Anurag Singh Thakur informed the Lok Sabha on Monday. Giving details of the total foreign direct investment (FDI) inflow from Chinese companies in India, he said, it was USD 350.22 million in 2017-18, while it declined to USD 229 million in the following year.
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
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.
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
Despite getting lukewarm response from the earlier two auctions, the government on Monday said it is confident of meeting the revenue target of Rs 40,000 crore (Rs 400 billion) from spectrum sale this fiscal.
India's services sector growth accelerated in April, as strong demand conditions resulted in the fastest increase in new business and output in close to 13 years, a monthly survey said on Wednesday. The pick-up in demand occurred in spite of escalating price pressures. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 57.8 in March to 62.0 in April, signalling the fastest expansion in output since mid 2010, amid a pick-up in new business growth and favourable market conditions.
The growth momentum in India's manufacturing sector was maintained in February, with new orders and output increasing at similar rates to January, according to a monthly survey. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) was at 55.3 in February, little-changed from 55.4 in January. The February PMI data pointed to an improvement in overall operating conditions for the 20th straight month. In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.
'Efforts to roll out GST from next fiscal'
'The actions of Indian monetary authorities will depend on how quickly they want the inflation to come down to 4 per cent.'
At a pre-Budget meeting, the FM was asked to ensure that NBFCs come out of the liquidity crisis they are facing with the help of RBI. They also spoke about the futility of trying to achieve a 3 per cent fiscal deficit target over the medium term.
Government needs tight control over both expenditure and populism.
To keep investors' confidence, however, Modi's government will need to be seen containing the fiscal deficit, while also increasing spending in key areas of the slowing economy.
This is not an election Budget in the sense that I might target the voter in the coming elections. But if you look beyond this round of state elections, and tilt the periscope to graze at the more distant horizon, see how the Narendra Modi government wishes things looking by the summer of 2024, observes Shekhar Gupta.
India's deployment of a direct cash transfer scheme and other similar social welfare programmes is a "logistical marvel", the International Monetary Fund (IMF) said on Wednesday. "From India, there is a lot to learn. There is a lot to learn from some other examples around the world. "We have examples from pretty much every continent and every level of income. "If I look at the case of India, it is actually quite impressive," Paolo Mauro, deputy director of the Fiscal Affairs Department at the IMF, told reporters at a news conference in Washington.
The tax base should comprehensively extend over all goods and services up to the final consumer point.
The economic fundamentals were strong enough to ensure 6-6.5 per cent growth in GDP during 2003-04, while fiscal deficit will be under control, D C Gupta, finance secretary said on Friday.
Former Prime Minister Manmohan Singh on Tuesday said the media needs to remain vigilant and flag shortcomings of the government with a view to improve the effectiveness of governance.
Credit rating agencies have been raising red flag over high debt to GDP ratio of India.
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