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Topic: fiscal deficit
There is a serious investment aversion in J&K today and deep uncertainty about the future. Most businesses with loans to pay off are unlikely to survive.
Manufacturing, construction, hotels and transport are among the worst-hit sectors. Tax revenues have contracted by 42% in the April-July period.
Fiscal deficit for 2020-21 was pegged at 3.5 per cent of GDP in Budget 2020. But Covid and the lockdown have made sure this is impossible to achieve.
Overseas funds have sold $14.6 billion of Indian corporate and government bonds this year, the most among emerging-Asian nations.
Data released by the Controller General of Accounts showed that contraction in tax revenues and rising expenditures pushed the fiscal deficit to over Rs 6.6 lakh crore in first quarter.
Facing fiscal deficit of 7%, Modi govt can get the Reserve Bank of India to buy sovereign bonds directly or boost dividends to help supplement revenue.
Speaking at ThePrint's OffTheCuff, Chief Economics Commentator at The Financial Times Martin Wolf said India can afford to increase its debt-to-GDP ratio to 90%, but should avoid borrowing in foreign currency.
Speaking to ThePrint’s Editor-in-Chief Shekhar Gupta at Off The Cuff, Kotak Mahindra Bank MD & CEO Uday Kotak said govt could explore direct cash transfers route if needed.
A sharp fall in tax revenues and lower-than-estimated nominal GDP has pushed the fiscal deficit ratio to levels last seen in 2012-13.
In her interviews to three newspapers, Finance Minister Nirmala said no decision on monetisation of deficit has been taken yet.