PM Modi advisor favors putting fiscal deficit concerns on backburner
3 years, 6 months ago

PM Modi advisor favors putting fiscal deficit concerns on backburner

Live Mint  

India should not let fiscal deficit worries stop it from spending more to fight the Covid-19 crisis, an adviser to Prime Minister Narendra Modi said. “The direct relation that people have talked about between fiscal expansion and inflation doesn’t really hold,” Kumar said, pointing to price-growth remaining mostly within the central bank’s targeted 2%-6% range this year. The recent spike in prices is temporary and “inflationary expectations remain anchored.” Data Monday showed inflation came in at a softer-than-expected 6.26% in June, although it was well above the Reserve Bank of India’s upper tolerance limit for a second straight month. Governor Shaktikanta Das last week said growth is the main challenge now and that inflation, while sticky, was only “a transitory hump.” Here are other key points from the interview with Kumar:

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History of this topic

Prudent policy: India should not let public debt eclipse the fiscal deficit
1 week, 2 days ago

Prudent policy: India should not let public debt eclipse the fiscal deficit

Live Mint  

In a 2020 address to the nation soon after the outbreak of covid, Prime Minister Narendra Modi cited age-old wisdom that advised against losing control of three things: fire, debt and disease. To cushion India’s economy from the pandemic’s shock, though, government spending had to vastly exceed its inflows, taking its fiscal deficit to 9% plus of GDP in 2020-21. …

Why inflation will matter more in 2025: Explained
2 weeks, 3 days ago

Why inflation will matter more in 2025: Explained

The Hindu  

The story so far: It has been what one may call, a bittersweet year for the economy, with a sweet first half, when growth surprised everyone, including the government. Top government functionaries have been making noises since late November about the need for RBI to cut rates, with some suggesting it should ignore volatile food prices and prioritise growth and …

DC Edit | Will RBI tweak inflation focus?
1 month ago

DC Edit | Will RBI tweak inflation focus?

Deccan Chronicle  

The appointment of Sanjay Malhotra as the new RBI governor continues the long-standing tradition of IAS officers heading the Central bank, a quasi-autonomous body that decides the country’s monetary policy. Mr Malhotra took over the charge of RBI from Shaktikanta Das — the second longest serving governor after Sir Benegal Rama Rau’s stint of seven years and 197 days — …

Economists ask Finance Minister to focus on growth rather than fiscal consolidation
1 month, 1 week ago

Economists ask Finance Minister to focus on growth rather than fiscal consolidation

New Indian Express  

NEW DELHI: With the second quarter GDP growth falling to a 7-quarter low of 5.4%, economists have asked the government to shift its policy focus to growth rather than fiscal consolidation. In a pre-budget meeting with finance minister Nirmala Sitharaman on Friday, a delegation of economists suggested the government readdress the pace of fiscal consolidation and take measures to boost …

RBI must restore balance between inflation, growth
1 month, 1 week ago

RBI must restore balance between inflation, growth

New Indian Express  

Despite the disappointing slump in economic growth, the RBI on Friday left the benchmark policy repo rate unchanged at 6.5 percent amid inflationary pressures. Maintaining a firm stance on inflation control, Governor Shaktikanta Das stressed that the central bank needed “more credible evidence” on the disinflationary process, which he said was getting prolonged and arduous. As Das rightly noted, there …

RBI must restore balance between inflation, growth
1 month, 1 week ago

RBI must restore balance between inflation, growth

New Indian Express  

Despite the disappointing slump in economic growth, the RBI on Friday left the benchmark policy repo rate unchanged at 6.5 percent amid inflationary pressures. Maintaining a firm stance on inflation control, Governor Shaktikanta Das stressed that the central bank needed “more credible evidence” on the disinflationary process, which he said was getting prolonged and arduous. As Das rightly noted, there …

Interim budget 2024: India aims to lower budget deficit, raise capex by 20%
1 year ago

Interim budget 2024: India aims to lower budget deficit, raise capex by 20%

India Today  

As India gears up for its 2024/25 budget, there are indications that the government is planning to reduce its budget deficit by at least 50 basis points from the current year's target of 5.9 per cent of Gross Domestic Product. Devendra Pant, an economist at India Ratings, was quoted in the report saying that reducing the government's money shortage and …

Growth getting stronger foothold, inflation coming under control, says RBI Governor Shaktikanta Das
1 year, 2 months ago

Growth getting stronger foothold, inflation coming under control, says RBI Governor Shaktikanta Das

The Hindu  

Reserve Bank Governor Shaktikanta Das on November 9 said economic growth in India is getting stronger foothold while inflation is also coming under control driven by the inherent dynamism and a prudent policy mix. Driven by its inherent dynamism and supported by a prudent policy mix, growth is getting stronger foothold while inflation is also coming under control," the governor …

Modi Government Bats on Front Foot to Combat Rising Inflation in India - News18
1 year, 4 months ago

Modi Government Bats on Front Foot to Combat Rising Inflation in India - News18

News 18  

Inflation is a global concern and quite a big one at that. The figures breached the upper end of the RBI’s inflation band of 2 to 6 per cent for the first time in five months. RBI NOT JUMPING THE GUN YET Around the world, the Central banks of various countries were rather immediate in rolling out interest rate hikes …

RBI holds rates, vows to keep price stability
1 year, 7 months ago

RBI holds rates, vows to keep price stability

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India, on the basis of an assessment of the current and evolving macroeconomic situation, on June 8 decided to keep the policy repo rate under the liquidity adjustment facility unchanged at 6.50% The standing deposit facility rate remains unchanged at 6.25% and the marginal standing facility rate and the Bank Rate …

India to face challenges in meeting fiscal deficit target: Report
1 year, 11 months ago

India to face challenges in meeting fiscal deficit target: Report

Hindustan Times  

India could find it challenging to meet the fiscal deficit target of 4.5% of GDP in 2025-26, an analyst at Fitch Ratings said on Wednesday, adding that the country's sovereign rating continues to remain stable. Earlier in the day, an official at Moody's Investors Service had also said that the government's fiscal deficit target for 2025/26 could see some risks. …

Sanjeev Ahluwalia | Indian economy between a rock and a hard place…
2 years, 1 month ago

Sanjeev Ahluwalia | Indian economy between a rock and a hard place…

Deccan Chronicle  

Growth is slowing in India. Tax revenues, however, increased at 18 per cent despite the loss of Rs 390 billion due to the partial rollback in excise tax on fuel -- to lower inflation and give income support to commuters. Revenue accretions could, however, slow in the second half this fiscal as the nominal growth rate slows to 12.5 per …

Inflation rising again is the last thing this fragile government needs
2 years, 2 months ago

Inflation rising again is the last thing this fragile government needs

The Independent  

As has been well-noted, the “headline” rate of inflation, at 10.1 per cent, is worrying and will push many who the Conservatives used to call the “just about managing” into poverty. The encouraging news is that Hunt has had a “meeting of minds” with Andrew Bailey, the governor of the Bank of England, and the pair are now working together …

IMF cuts India’s FY 2022-23 growth forecast to 6.8%
2 years, 3 months ago

IMF cuts India’s FY 2022-23 growth forecast to 6.8%

The Hindu  

The world, including India, will experience an overall slowdown in the next year owing to the impact of the Russia-Ukraine war, tightening monetary conditions globally, the highest inflation in decades, and lingering effects of the pandemic, according to the International Monetary Fund. India is projected to grow at 6.8% in the current fiscal year, following 8.7% growth in the fiscal …

Why the RBI is unlikely to slow down in curbing inflation
2 years, 3 months ago

Why the RBI is unlikely to slow down in curbing inflation

Live Mint  

Global growth is slowing rapidly, inflation is stubbornly high and central banks in developed nations are hiking interest rates by magnitudes not seen in decades. At other times, new data sources are introduced to make statistics more accurate, particularly to capture India’s informal sector better. Why the wait for new trade policy just got longer Busted: The myth of India …

Front-loaded rate increases needed to curb inflation, RBI officials
2 years, 3 months ago

Front-loaded rate increases needed to curb inflation, RBI officials

The Hindu  

The Reserve Bank of India said on Friday it will have to front-load its monetary policy to fight stubborn inflation and shield medium-term growth in the world's fifth-largest economy. Inflation in India has remained above the apex bank's tolerance level since January, prompting it to raise interest rates by a total of 140 basis points in the current cycle. "Front-loading …

Recession in advanced economies may cool prices in India
2 years, 6 months ago

Recession in advanced economies may cool prices in India

Live Mint  

Recessions in advanced economies may benefit India in a “perverse way” as a moderation in global commodities prices will help cool domestic inflation, according to Citigroup Inc.’s head of economics for the country. “India being a net importer of commodities should benefit on the inflation front,” Samiran Chakraborty, managing director and chief economist for India at Citigroup, said in an …

Several states showing warning signs of stress; need to take corrective actions, says RBI article
2 years, 6 months ago

Several states showing warning signs of stress; need to take corrective actions, says RBI article

Firstpost  

The article was prepared by a team of economist under the guidance of deputy governor Michael Debabrata Patra Mumbai: Referring to economic crisis in Sri Lanka, a Reserve Bank article on Thursday said states are showing warning signs of building stress, and the five most indebted ones – Punjab, Rajasthan, Bihar, Kerala and West Bengal – need to take corrective …

Govt seen boosting budget spending on infrastructure
2 years, 11 months ago

Govt seen boosting budget spending on infrastructure

Live Mint  

India plans to raise spending on infrastructure in its annual budget next week to set the economy on a firmer footing, but fiscal constraints leave little chance of concessions for households hurting from the pandemic, officials said. Yet these are likely to be overshadowed by spending to beef up transport and healthcare networks, which analysts estimate could rise between 12% …

Slower Consolidation to Constrain India's Fiscal Strength Over Medium Term: Moody's
3 years, 11 months ago

Slower Consolidation to Constrain India's Fiscal Strength Over Medium Term: Moody's

News 18  

Rating agency Moody’s on Wednesday India’s fiscal deficit projections are higher than expected and slower consolidation will constrain its fiscal strength over the medium term. The US-based agency said it expects India’s nominal GDP growth to rise to closer to 17 per cent in fiscal 2021, higher than 14.4 per cent projected in the Budget. The budget’s focus on higher …

Opinion | Use a bigger dose of fiscal stimulus to combat this crisis
4 years, 5 months ago

Opinion | Use a bigger dose of fiscal stimulus to combat this crisis

Live Mint  

There have been several occasions when the Reserve Bank of India has had to confront the dilemma of tackling sliding growth and rising inflation at once. In March, governor Shaktikanta Das said that monetary policy would play an “avant-garde” role and do “whatever it takes” to protect growth from the impact of covid-19. After the global financial crisis of 2009, …

Moody’s Cuts India’s Growth Forecast to 5.8% from 6.2% for FY20
5 years, 3 months ago

Moody’s Cuts India’s Growth Forecast to 5.8% from 6.2% for FY20

The Quint  

"While we expect a moderate pick-up in real GDP growth and inflation over the next two years supported by monetary and fiscal stimulus, we have revised down our projections for both. Moody's expected a 0.4 percentage point slippage in the fiscal deficit target of the government to 3.7 percent of the GDP in the current fiscal due to the corporate …

Deficit need not be a dirty word; Modi 2.0 should ease up on fiscal fetish to put economy back on the runway
5 years, 6 months ago

Deficit need not be a dirty word; Modi 2.0 should ease up on fiscal fetish to put economy back on the runway

Firstpost  

It is time for Narendra Modi’s government to act in the interest of the future of the economy and do some unconventional things Imagine you are a young traveller at the entrance of an airport, in time for your flight, but there is a family in front, with loads of luggage, somewhat mischievous children, and parents who stand confused. It …

Facts, No Fiction: Recent farm loan waiver prove that Congress hasn’t learnt from its past mistakes that drove fiscal deficit up
6 years ago

Facts, No Fiction: Recent farm loan waiver prove that Congress hasn’t learnt from its past mistakes that drove fiscal deficit up

Op India  

The recent trend of populist announcements in the run-up to elections by the Congress for petty political gains indicates a reluctant party that is unwilling to learn from its macroeconomic blunders. This is in contrast with the UPA era where fiscal deficit, current account deficit, inflation and interest rates were all significantly high. Thus, the increase in inflation post-2011 can …

Inflation under control, Govt confident of achieving 3.3% fiscal deficit target: Arun Jaitley
6 years, 3 months ago

Inflation under control, Govt confident of achieving 3.3% fiscal deficit target: Arun Jaitley

India TV News  

Union Finance Minister Arun Jaitley on Saturday said inflation was under control, and expressed confidence for achieving a fiscal deficit target of 3.3 per cent. A day after steps to contain the widening current account deficit and check fall of the rupee were announced, Prime Minister Narendra Modi on Saturday continued his two-day review of the economy as he took …

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