While Centre makes progress lowering debt from pandemic peak and cutting borrowing costs, states face slower adjustment with limited market discipline, survey finds.
While bond yields tend to fall amid low inflation & interest rate cuts, market experts say they’ve been rising due to concerns over tax collections, fiscal deficit & potential impact of US tariffs.
Kerala brought down the deficit for 2022-2023 to under 3 percent, in line with FRBM guidelines, but is still expecting to slightly breach the limit in 2024-2025 and 2025-2026.
Govt has done well to stick to path of fiscal consolidation. It’s unclear if compression of revenue spends net of interest payments is the direction the govt would like to take in coming yrs.
Corporate tax collections saw modest growth of just 1.2%, but a 20.2% rise in income tax collections helped strengthen the government's overall revenue position.
Maharashtra has headroom to spend, but committed expenditure is expected to rise. In Jharkhand, optimistic revenue projections may limit the state govt’s ability to fulfill the promises.
Haryana has seen good growth, keeping its deficit within limit in recent years. Inclusive development, fixing unemployment, bridging rural-urban inflation gap should be new govt’s priorities.
IAF is firming up plans to revamp airlift capabilities with medium transport aircraft that will be assembled in India & serve as its main workhorse. Embraer is leading contender as of now.
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