In the current fiscal year, tax and non-tax revenue collections could take a hit. The projections will need to be recalibrated in light of the uncertain environment.
Both the government and the RBI are currently so focused on their respective targets that they are losing sight of the fact that some flexibility might actually be a good thing.
Instead, govt will use ratio of govt debt-to-GDP as anchor for fiscal policy, Somanathan said. Historically, India has targeted fiscal deficit of 3% of GDP but failed to achieve it.
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.
While boosting capex & rural spending, govt has set fiscal deficit target of 5.1% of GDP, which means Centre will have to borrow less to finance deficit, allowing pvt sector to borrow more.
India's fiscal deficit in the first seven months of the FY ending in March 2024 was $96.86 billion, or 45% of the estimate for the whole year, according to official data.
Earlier in a statement, the rating agency said the narrower fiscal deficit underscores the Modi government's commitment to longer-term fiscal sustainability.
Govt had set ambitious target of Rs 1,75,000 crore in Union Budget, with over a third of receipts targeted from the listing of Life Insurance Corporation and privatisation of BPCL.
DEA secretary says govt will do all that’s necessary to meet expenditures related to health, to provide for the poor and for resurgence and recovery of industry.
Since the bulk of citizens did not regard drinking as a crime, they had no respect for the prohibition laws and did not cooperate with the police, wrote MV Venkata Rao in 1962.
We now live in a world order that will keep shifting. India must use this window. This also means we remain disciplined enough not to be knee-jerked into reacting to what Pakistan sees as its moment in the sun.
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