Prudent policy: India should not let public debt eclipse the fiscal deficit
1 week, 1 day 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. Signalling a shift in approach, the last budget revealed an intent to target the level of public debt, rather than the annual fisc, in subsequent years as a way to keep overspending in check. Had India’s recovery in demand been broader, a 4.5% gap may have been a big worry for the central bank, whose job is to retain the rupee’s real value even if a fiscal pump makes rupee supply spurt. Yet, for faster growth, we still need a broad revival of ‘animal spirits.’ And the fiscal deficit will remain a useful economic indicator that must not get eclipsed by a focus on public debt.

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History of this topic

India must revive PPPs and reform its bond market to boost economic growth
5 days, 23 hours ago

India must revive PPPs and reform its bond market to boost economic growth

Live Mint  

At 6.4%, India’s likely growth rate for 2024-25 as estimated by the National Statistics Office, would be lower than not just earlier estimates, but even the recently revised estimate of the central bank. Talk of India being the world’s fastest growing large economy brings little cheer to Indians, except at top levels of the pyramid. In short, for India to …

India’s budget needs to address three medium-to-long term priorities
2 weeks, 5 days ago

India’s budget needs to address three medium-to-long term priorities

Live Mint  

As we approach the new year, preparation of the annual budget is proceeding in earnest. Apart from the annual balancing of expenditure, revenues and the deficit, the next budget will hopefully address some medium-to-long term priorities, as there is no other policy document that can address these concerns in the post-Five Year Plan era. Muted growth during the last two …

India’s Economy Is Likely to Grow by 6.5 per Cent in the Current and the Next Financial Year
2 weeks, 6 days ago

India’s Economy Is Likely to Grow by 6.5 per Cent in the Current and the Next Financial Year

Deccan Chronicle  

New Delhi: India's economy is likely to grow by 6.5 per cent in the current and the next financial year, attributing lower than anticipated expansion in the September quarter to fall in private consumption expenditure and gross fixed capital formation. The economy continued to be negative even in October 2024 at 8.4 per cent, implying that in the first seven …

Policymakers, economists pin hopes on government spending to propel economic recovery amid sluggish growth
Trending News
3 weeks, 1 day ago

Policymakers, economists pin hopes on government spending to propel economic recovery amid sluggish growth

Live Mint  

After two consecutive quarters of sluggish economic growth, policymakers and economists are banking on a turnaround in the second half of the fiscal year, driven by increased government spending, a boost from the ongoing festive season, and resilient rural consumption. Economists note that while India is expected to retain its status as the fastest-growing major economy over the next five …

RBI asks States to have sustained fiscal prudence
3 weeks, 5 days ago

RBI asks States to have sustained fiscal prudence

The Hindu  

State governments contained their consolidated gross fiscal deficit within 3% of the gross domestic product and their revenue deficit at 0.2% of GDP during 2022-23 and 2023-24, the Reserve Bank of India said in its report on state finances. “In view of high debt levels, contingent liabilities and the rising subsidy burden, State government finances would benefit from the adoption …

RBI flags concerns over state sops even as tax revenue grows, spending quality improves
3 weeks, 5 days ago

RBI flags concerns over state sops even as tax revenue grows, spending quality improves

Live Mint  

Mumbai: India’s banking regulator has flagged concerns about a slew of sops announced by several states, even as their tax revenue has grown faster than the economic growth rate after the pandemic year of FY21, and spending quality improved in favour of more productive asset creation. Even as capital expenditure is projected to increase this year, states are expected to …

RBI flags concerns over state sops even as tax revenue grows, spending quality improves
3 weeks, 5 days ago

RBI flags concerns over state sops even as tax revenue grows, spending quality improves

Live Mint  

Mumbai: India’s banking regulator has flagged concerns about a slew of sops announced by several states, even as their tax revenue has grown faster than the economic growth rate after the pandemic year of FY21, and spending quality improved in favour of more productive asset creation. Even as capital expenditure is projected to increase this year, states are expected to …

India’s fiscal deficit will be 4.8 pc in FY25, below budget estimate of 4.9 pc: CareEdge Ratings
4 weeks, 1 day ago

India’s fiscal deficit will be 4.8 pc in FY25, below budget estimate of 4.9 pc: CareEdge Ratings

Live Mint  

New Delhi, December 16 : The fiscal deficit of the central government is projected to be 4.8 per cent of GDP for FY25, slightly below the budgeted estimate of 4.9 per cent, according to a report by CareEdge Ratings. It said "Overall, we project the fiscal deficit at 4.8 per cent of GDP, marginally lower than the budgeted 4.9 per …

It’s time for government to loosen fiscal belt, spur the economy
1 month ago

It’s time for government to loosen fiscal belt, spur the economy

New Indian Express  

The voices that support growth over fiscal and monetary prudence are getting louder, especially after the second quarter GDP numbers highlighted the fatigue that has set in in the economy. The next Union budget presents an opportunity to put out some bold measures—including a less aggressive fiscal consolidation roadmap and even tax sops, if needed, to send up a few …

India Inc Calls for Balanced Fiscal Management
1 month ago

India Inc Calls for Balanced Fiscal Management

Deccan Chronicle  

: Amid a slowing global economy, India Inc on Sunday urged the government to maintain a balanced fiscal management for macroeconomic stability with some more interventions to nudge the states towards fiscal prudence. It further said that this exercise would help forecast potential economic headwinds or tailwinds and assess their impact on the fiscal path.Looking at the next year’s budget, …

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 …

India’s GDP growth shocker: Bad news can be good too
1 month, 1 week ago

India’s GDP growth shocker: Bad news can be good too

Live Mint  

India’s growth in gross domestic product of 5.4% in the three months ended 30 September, or the second quarter of 2024-25, was a shocker. It’s the lowest level seen since the third quarter of 2022-23 and a sharp drop from 8.1% growth in the same period last year and also from 6.7% in the first quarter of 2024-25. Given the …

Reeves' sniffle makes the bond markets shiver, says PATRICK TOOHER
2 months, 2 weeks ago

Reeves' sniffle makes the bond markets shiver, says PATRICK TOOHER

Daily Mail  

Rachel Reeves clearly loves her new borrowing rules. Bending the rules: The Chancellor has ditched the old way of measuring the parlous state of the public finances so that she can borrow more to fund a spending spree But no amount of magic wand-waving and crystal-ball gazing can hide the fact the national debt remains on an ‘unsustainable’ course. Even …

Central government debt set to double to ₹185 trillion by FY25 amid fiscal challenges and policy shifts
5 months, 2 weeks ago

Central government debt set to double to ₹185 trillion by FY25 amid fiscal challenges and policy shifts

Live Mint  

India's central government debt is projected to escalate to ₹185.27 trillion, or 56.8% of GDP, by the financial year 2024-25, up from ₹93.26 trillion, or 49.3% of GDP, in 2018-19, the minister of state for finance Pankaj Chaudhary said in a written reply to the Lok Sabha on Monday. This projected increase in debt follows a significant rise over the …

Govt. on track to reduce fiscal deficit: Fitch
5 months, 2 weeks ago

Govt. on track to reduce fiscal deficit: Fitch

The Hindu  

Fitch Ratings on Friday exuded confidence that the Government of India should be able to achieve its enhanced goal of reducing the fiscal deficit to 4.9% of GDP this year, and further below 4.5% of GDP next year, but noted that the post-election Budget did not provide much clarity on medium-term targets. While the Budget did highlight “a desire to …

Budget 2024: Prioritising inclusivity and fiscal prudence
5 months, 3 weeks ago

Budget 2024: Prioritising inclusivity and fiscal prudence

The Hindu  

There was a lot of anticipation before this Budget. As the first major public policy announcement of the new government, it was expected that the Budget would lay down a plan of action for the following five years of the government’s approach towards the larger national vision of Viksit Bharat@2047. With the nine priority areas that followed, she articulated the …

India's rating upgrade possible in next 24 months if fiscal deficit falls to 4%: S&P
6 months, 1 week ago

India's rating upgrade possible in next 24 months if fiscal deficit falls to 4%: S&P

The Hindu  

A sovereign rating upgrade for India in the next 24 months is possible if the central government is able to prudently manage its finances and bring down fiscal deficit to 4% of GDP, an S&P Global Ratings official said on July 3. S&P Global Ratings Director, Sovereign Ratings, YeeFarn Phua, said the trigger for upgrade would be general government deficit …

India should bring back fiscal positions to pre-pandemic levels: IMF
7 months, 1 week ago

India should bring back fiscal positions to pre-pandemic levels: IMF

Deccan Chronicle  

Chennai: The International Monetary Fund has advised countries, including India, which have elections this year, to begin fiscal consolidation in order to bring fiscal positions back to pre-pandemic levels. When asked about the concern IMF expressed about the governments being tempted to increase public spending during election years in countries, including Mexico and India, Julie Kozack, Director of the Communications …

Risky premise: On Asian Development Bank forecast, India’s GDP growth
9 months ago

Risky premise: On Asian Development Bank forecast, India’s GDP growth

The Hindu  

The Asian Development Bank on Thursday raised its forecast for India’s GDP growth in the current fiscal year ending on March 31, 2025, to 7%, from 6.7% earlier, citing robust public and private investment as well as expectations of a gradual improvement in consumer demand as the rural economy recovers. The ADB’s latest growth forecast for India’s GDP is, however, …

Raging inflation, stagnant wages forcing households into debt: Congress
9 months ago

Raging inflation, stagnant wages forcing households into debt: Congress

The Hindu  

The alarm bells are ringing for the Indian economy, but Prime Minister Narendra Modi has not heard them, the Congress said on April 9. The principal Opposition party’s statement was in response to a news report in The Hindu that quoted the findings of leading financial services firm Motilal Oswal on India’s growing household debt. Party general secretary Jairam Ramesh …

RBI Rejects IMF Warning of India's Debt to GDP Exceeding 100%
10 months, 3 weeks ago

RBI Rejects IMF Warning of India's Debt to GDP Exceeding 100%

Deccan Chronicle  

Mumbai: Spending on social and physical infrastructure, climate mitigation,digitalisation and skilling the labour force can yield long-lasting growth dividends. Using a dynamic stochastic general equilibrium model, the economists found that if the government expenditure is directed towards employment-generating sectors, climate risk mitigation and digitalisation, the debt-GDP ratio of the general government can decline substantially to 73.4 per cent of GDP …

Various Measures Taken To Reduce Debt Burden, Strengthen Economy: FM Nirmala Sitharaman
11 months, 1 week ago

Various Measures Taken To Reduce Debt Burden, Strengthen Economy: FM Nirmala Sitharaman

News 18  

To bring down the debt burden, the government has taken various measures like increasing the tax revenue buoyancy, enhancing the public expenditure effectiveness, commitment to reducing fiscal deficit and augmenting the productive efficiency, Finance Minister Nirmala Sitharaman said on Monday. The government’s emphasis on increasing capital expenditure will not only boost the investments, but also return a higher GDP growth …

Budget 2024: Delicate balancing by government testament to stability, growth
11 months, 1 week ago

Budget 2024: Delicate balancing by government testament to stability, growth

Live Mint  

Navigating the intricate journey of presenting an interim budget in the lead-up to general elections presents a formidable challenge. This has resulted in a delicate balancing act, culminating in a budget that stands as a testament to stability, growth, and the government's unwavering dedication to inclusive development. The government has taken a bold step by elevating the capital expenditure for …

Poll posture: On the 2024 Interim Budget
11 months, 1 week ago

Poll posture: On the 2024 Interim Budget

The Hindu  

Finance Minister Nirmala Sitharaman’s sixth consecutive Budget speech was an election-eve, self-congratulatory report card on the economic achievements engendered by Prime Minister Narendra Modi and the two governments he has led since 2014. Echoing the Finance Ministry’s review of the economy’s performance, and stating that Mr. Modi had inherited a situation replete with ‘enormous challenges’ when he assumed office, Ms. …

Budget 2024: It’s tax buoyancy that shrank the deficit
11 months, 1 week ago

Budget 2024: It’s tax buoyancy that shrank the deficit

Live Mint  

A quick glance at the fiscal arithmetic reveals that there is no severe fiscal austerity proposed in the budget. Given nominal GDP growth of 10.5% and aggregate tax revenue growth of 11.5%, the government has met its fiscal deficit target through tax buoyancy, and not through severe public expenditure reduction. As against a 2023-24 Budget Estimate of ₹61,000 crore, the …

Budget 2024: Can India become a $7 trillion economy by 2030?
11 months, 2 weeks ago

Budget 2024: Can India become a $7 trillion economy by 2030?

India Today  

A recent review report released by the government has estimated India's potential economic trajectory, aiming to hit the $7 trillion mark by 2030, ahead of the upcoming Interim Budget 2024-25. "India's unwavering commitment to ensuring steady economic growth is generating resources for investment needed for climate change adaptation, building resilience, and mitigating emissions,' the Finance Ministry report said. The report …

Credibility has been a highlight of India’s budgets
11 months, 2 weeks ago

Credibility has been a highlight of India’s budgets

Live Mint  

As per indications, this is likely to be an interim budget, though there is no constitutional provision to present an interim budget before a general election. Even as the interim budget may be devoid of policy announcements, it is important to look at the budget from the lens of what the government would want to achieve from a fiscal policy …

Discretionary Spending Could Almost Triple to $2k Billion By 2030
11 months, 3 weeks ago

Discretionary Spending Could Almost Triple to $2k Billion By 2030

Deccan Chronicle  

Chennai: Expansion of private spending would lead to greater share of discretionary spending in India's consumption basket. Our estimates suggest that aggregate discretionary consumption could almost triple from $657 billion in 2022 to as much as $2,000 billion by 2030. Expanding aggregate private spending would see a greater share of discretionary spending in India's consumption basket. Barclays’ estimates suggest that …

Budget 2024: Government likely to maintain momentum on increasing capital expenditure
11 months, 3 weeks ago

Budget 2024: Government likely to maintain momentum on increasing capital expenditure

India TV News  

The government is expected to maintain its focus on increasing capital expenditure in the upcoming budget, particularly in the infrastructure sector, to stimulate economic growth amid subdued private investment. Since the post-COVID period, the budget has consistently emphasised capital expenditure, leading to over 7 per cent growth in the last three years, making India the fastest-growing large economy globally. In …

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 …

Shedding more light on the debt dilemma
1 year, 5 months ago

Shedding more light on the debt dilemma

The Hindu  

The elevated levels of India’s fiscal deficit and public debt have been a matter of concern for a long time in India. Financial repression The debt-dynamics equation states that when there is no primary deficit, if the growth rate of GDP exceeds the effective interest rate paid on government bonds, the overall debt will decline. When the interest rate on …

India likely to have stable debt-to-GDP ratio going forward, says IMF official
1 year, 9 months ago

India likely to have stable debt-to-GDP ratio going forward, says IMF official

Deccan Chronicle  

WASHINGTON: India is expected to have a stable debt-to-GDP ratio going forward, a senior official from the International Monetary Fund said on Wednesday and recommended rationalization and simplification of Goods and Services Tax. According to Paolo Mauro, Deputy Director of the IMF Fiscal Affairs Department, there will be a gradual resumption of the rise in the global public debt-to-GDP ratio …

ADB pares India’s growth hopes to 6.4%
1 year, 9 months ago

ADB pares India’s growth hopes to 6.4%

The Hindu  

The Asian Development Bank has slashed its growth projection for India for 2023-24 sharply from 7.2% estimated earlier to 6.4%, attributing the cut to the global economic slowdown, tight monetary conditions, and persistently elevated oil prices. While domestic consumption demand is likely to stay healthy, private investment growth is likely to be lower this year due to high lending rates …

India needs a Budget for its young
1 year, 10 months ago

India needs a Budget for its young

The Hindu  

The world is indeed looking up to the Indian economy as a ‘bright star’, as the Finance Minister noted in the Budget speech on February 1. In contrast to capital expenditures, subsidies and social sector spending are considered ‘wasteful’ and, therefore, it is believed, a cut on their outlays will not hurt economic growth. Unwarranted fears about fiscal deficit Inflated …

Explained | Is the government on track on fiscal deficit targets?
1 year, 11 months ago

Explained | Is the government on track on fiscal deficit targets?

The Hindu  

The story so far: In the Union Budget for 2023-24, Finance Minister Nirmala Sitharaman chose the path of relative fiscal prudence and projected a decline in fiscal deficit to 5.9% of gross domestic product in FY24, compared with 6.4% in FY23. In Union Budget 2023-24, the fiscal deficit to GDP is pegged at 5.9% in FY24. The primary deficit, which …

Budget 2023 | On the right course: A growth-oriented Budget: Keki Mistry
1 year, 11 months ago

Budget 2023 | On the right course: A growth-oriented Budget: Keki Mistry

The Hindu  

The Union Budget is one of the most anticipated annual events, where India has consistently embarked on numerous reforms bringing about structural changes. In my opinion, the Finance Minister this year rightly focussed on key factors that align with the larger vision of the government: boosting economic growth, employment generation, encouraging savings and investments, and fiscal consolidation. The government needs …

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. …

Citizens\' expectations of the budget
1 year, 11 months ago

Citizens\' expectations of the budget

Deccan Chronicle  

With Union finance minister Nirmala Sitharaman all set to present the Budget on Wednesday, experts speak of their expectations. With India preparing to increase its spending towards the public health expenditure sector to 2.5 per cent of GDP by 2025, this sector can see a record increase. Nabhan Mahmood, real estate businessman Our recommendations to the ministry of finance include …

Budget 2023. Economists Expect Budget To Focus On Strengthening Manufacturing, Creating Jobs: Report
1 year, 11 months ago

Budget 2023. Economists Expect Budget To Focus On Strengthening Manufacturing, Creating Jobs: Report

ABP News  

In just two days Budget 2023 will be presented in the Lok Sabha. According to the survey, the majority of economists expect this Budget "to steer clear of populist measures and focus on strengthening manufacturing and creating jobs." According to HSBC Holding Plc’s chief India economist Pranjul Bhandari, the nation’s path to fiscal consolidation will require a herculean effort. The …

What India may get from this budget
1 year, 11 months ago

What India may get from this budget

Hindustan Times  

As we approach the 2023-24 Union Budget, it is difficult to deny that India’s fiscal position, the banking system, and economic recovery appear to be much better than what one may have feared in March 2020. Indeed, the improvement in India’s tax-to-Gross Domestic Product ratio, which is often attributed to an unequal recovery with larger corporations gaining market share, has …

India will face especially complex policy challenges next fiscal year
2 years ago

India will face especially complex policy challenges next fiscal year

Live Mint  

The Indian economy has come out of the pandemic in far better shape than most other large economies as well as some of our neighbours. High nominal GDP growth over the past two years helped the government improve tax collections, and thus meet its deficit targets despite higher subsidies. It also meant that nominal growth was much higher than borrowing …

Explained | Is the economy driving with the brakes on?
2 years ago

Explained | Is the economy driving with the brakes on?

The Hindu  

The story so far: At this time last December, India’s economy was on the cusp of a fledgling recovery from the COVID-19 pandemic, though the Omicron variant posed fresh speed bumps for the rebound. As JP Morgan managing director and India chief economist Sajjid Chinoy explained at a CII economic policy summit last week, 2022 was expected to see a …

India’s chance to shed pandemic scars and reach out for the stars
2 years ago

India’s chance to shed pandemic scars and reach out for the stars

Live Mint  

Many of us are stepping into 2023 with some trepidation. We believe two things must go right for India to achieve ‘stronger-for-longer’ growth: macro stability and a continuation of reforms. There are some new high-growth sectors which could raise India’s potential growth in the medium term. And we see India’s green-transition ambitions as an opportunity, spurring investment in emerging sectors …

India's public capex may not need to expand at same pace in coming years, says CEA
2 years, 1 month ago

India's public capex may not need to expand at same pace in coming years, says CEA

The Hindu  

India's public sector capital expenditure will continue, but may not need to expand at the same pace as it has in recent years, the country's chief economic adviser said on Friday. Therefore, it may not be necessary or even healthy for public sector to keep expanding capital investment at the same pace, he added. As private firms start to borrow …

5 charts show why the world is cheering India's economy
2 years, 1 month ago

5 charts show why the world is cheering India's economy

Live Mint  

NEW DELHI : On more than one occasion in recent months, India has been hailed for holding its head high amid a looming global economic slowdown. India will spend ₹3,500 crore on toys to outplay China Why housing real estate remains a losing proposition This manager's small-cap fund gave 40% CAGR returns in 3 yrs View Full Image Mint The …

India could trim spending for first time in 3 years: Report
2 years, 2 months ago

India could trim spending for first time in 3 years: Report

Live Mint  

Spending by the Indian government this fiscal year could be less than budgeted for the first time in three years, two sources with direct knowledge of the matter told Reuters, amid a push to meet a fiscal deficit target of 6.4% of gross domestic product. Total expenditure for the 2022/23 fiscal year that started on April 1 could come in …

Bright growth prospects driving high imports, financing them a top priority: Finance Ministry
2 years, 3 months ago

Bright growth prospects driving high imports, financing them a top priority: Finance Ministry

The Hindu  

India’s growth has been robust and inflation in control, even as the world’s major economies are afflicted by slowing growth and high inflation, the Finance Ministry said on Saturday, reckoning that the economy will grow 7.2% this year driven by a revival in consumption, employment and investments. The Finance Ministry attributed the ‘inflation acceleration in 2022 compared to 2021’ to …

Monthly economic review | India’s growth to be sustained by consumer spending rebound
2 years, 3 months ago

Monthly economic review | India’s growth to be sustained by consumer spending rebound

The Hindu  

A sharp rebound in consumer spending and rising employment will sustain economic growth in India in the months ahead, the government said in its monthly economic review for August published on Saturday. The report also said high levels of foreign exchange reserves, sustained foreign direct investment and strong export earnings have provided a reasonable buffer against monetary policy normalisation in …

India on course to achieve 7% growth in FY23: Finance Secretary TV Somanathan
2 years, 4 months ago

India on course to achieve 7% growth in FY23: Finance Secretary TV Somanathan

Live Mint  

Finance Secretary TV Somanathan told reporters in New Delhi that India's economy will grow at more than 7% in current financial year. On GST collection for the month of August, Economic Affairs Secretary Ajay Seth said it's expected to be in range of ₹1.42-1.43 lakh crore, in signs of buoyancy in economy. Economists said Asia's third-largest economy faced downward risks …

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