Himachal's treasury has notched up overdraft of Rs 1,000 cr in 1st quarter, it is learnt. Congress's poll promises are expected to burden the state's coffers further.
Power sector reforms, preventing leakages in subsidies payments and avoiding fiscally unwise decisions like reversion to old pension system can help improve their financial health.
Govt is being sensible in asking for bigger RBI dividend & raising petroleum taxes. But Covid is increasing fiscal stress caused by preceding economic slowdown.
Emerging from the Covid crisis, the Centre will have to take a fresh approach to reviving growth, re-visiting fiscal balance with states, re-imagining GST etc.
Either Modi govt is expecting a revenue windfall that will be passed on to states, or states will be squeezed even further. My guess is it will be the latter.
Experts say debt is not a problem as long as it is sustainable. The issue is whether the massive generation of debt since the global financial crisis is going to be profitable.
Standing up to America is usually not a personal risk for a leader in India. Any suggestions of foreign pressure unites India behind who they see as leading them in that fight.
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