Three laws passed in Parliament could boost central revenues, reshape GST cess flows, shift MGNREGA costs to states and create new budget headroom ahead of the 2026-2027 Union Budget, points out A K Bhattacharya.
If the Centre and states are keen on spending more to meet the COVID-19 challenges in the coming year, they must bear in mind the need to raise more resources through taxes and non-tax revenues, suggests A K Bhattacharya.
Fitch Ratings has cut India's economic growth forecast to 8.7 per cent for the current fiscal but raised GDP growth projection for FY23 to 10 per cent, saying the second COVID-19 wave delayed rather than derail the economic recovery. In its APAC Sovereign Credit Overview, Fitch Ratings said India's 'BBB-/Negative' sovereign rating "balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors". The 'Negative' outlook, it said, reflects uncertainty over the debt trajectory following the sharp deterioration in India's public finances due to the pandemic shock.
Budget for 2022-2023 has returned to its agenda for protectionism in the name of creating a self-reliant India, points out A K Bhattacharya.
Fitch Ratings on Thursday said the resurgence of COVID-19 infections may delay India's economic recovery, but won't derail it, as it kept the sovereign rating unchanged at 'BBB-' with a negative outlook. It projected a 12.8 per cent recovery in GDP in the fiscal year ending March 2022 (FY22), moderating to 5.8 per cent in FY23, from an estimated contraction of 7.5 per cent in 2020-21. Fitch had in June last year revised outlook for India to 'negative' from 'stable' on grounds that the coronavirus pandemic had significantly weakened the country's growth outlook and exposed the challenges associated with a high public debt burden.
The cheer of the New Year was darkened by news that India's public finances continue to be in dire straits.
Moody's said the government will face challenges in achieving its deficit target for the fiscal year ending March 2021, amid persistent structural and cyclical headwinds to growth.
Do you think the new pay panel proposals will cripple India's economy? Are political compulsions overriding economic sense? Or do you think this is a fair move? Tell us.
Economist Arvind Panagariya has also argued for loosening deficit targets to boost capital spending
India will have to devise policies to ensure overall growth in FY16.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances