Most global central banks acknowledge easing in inflation but note it remains above target. Recent geopolitical disruptions also pose upside risk to inflation, a view held by RBI as well.
Capital expenditure for next FY is achievable but could be challenging given this year's under-achievement. Moreover, rise of interest payments doesn't bode well for quality of expenditure.
The interim budget, to be presented on 1 February, is likely to maintain focus on fiscal consolidation along with a thrust on capital expenditure, although at a moderated pace.
Northeastern states feature among the most indebted. Many of these states also have high levels of committed expenditure, which means they have less left over for capital creation.
Govt's first advance estimates peg India’s nominal GDP growth at 8.9%, lowest since Covid-hit 2020-21 & lower than 10.5% assumed at start of year. This could put pressure on fiscal deficit target.
RBI's Financial Stability Report & Report on Trend & Progress of Banking in India show growing inter-connectedness between banks and non-bank financial companies could pose systemic risk concerns.
Apart from these factors, in the new year, food prices will continue to be vulnerable to global uncertainties & weather events, while household borrowings from banks will remain steady.
Govt, RBI term IMF’s exchange rate re-classification as arbitrary. They also disagree with its assertion that India’s general govt debt-GDP ratio could exceed 100% of GDP in medium term.
RBI has retained its inflation projection at 5.4% for the current year. Uncertainties in food prices and volatility in global crude oil prices continue to keep 4% target out of reach.
With tax revenue not doing as well as needed, govt has few choices before it: reduce subsidy-led revenue expenditure, cut back on growth-oriented capex, or miss its fiscal deficit target.
The attack on Chhayanaut, newspaper offices, and the public lynching of a Hindu man show that Bangladesh is heading toward Islamist rule, far removed from electoral democracy.
It is argued that India-Israel ties are moving from buyer–seller dynamic to one focused on joint development & manufacturing partnership, a shift 'more durable' than traditional arms sales.
If Pathaan gave both conservatives and liberals room to hide, Dhurandhar extends no such courtesy. Aditya Dhar ripped open that tent of hypocrisy and turned the knife.
COMMENTS