States are increasingly borrowing to finance subsidies. This reduces fiscal space for capital and other developmental expenditure, compromising long-term growth.
State govt provides an annual average subsidy of Rs 52,000 per pump set. And while rising subsidy costs are straining state finances, cutting back on these carries political risks.
Most Indians are spending more on essential items than last year while earning either less or the same amount. No wonder they turn to 'buy now, pay later' schemes.
Subsidies are here to stay. Worryingly, subsidy expenditure will likely increase as Indian politicians try to meet a wider set of aspirations through more diverse freebies.
According to govt data, the average all-India retail price of tomatoes was Rs 116.86/kg Saturday, with the maximum touching Rs 250/kg. In Delhi, tomatoes were prices Rs 178/kg.
The Narendra Modi government is looking at ways to check states’ spending on handouts like free electricity and rations. The first step is to tighten the noose on state borrowings.
Budget deficit target is doable, increased capex is a positive & it takes a realistic, if political, view of disinvestment. But protectionism, rising debts, slashed subsidies are problems.
For all their colonial underpinnings, postcards from Hyderabad also inadvertently preserve a trace of local memory: a glimpse of a street, a face, a forgotten name.
Indian toymakers are now exploring new markets, but they want govt to negotiate a trade deal with US soon, introduce incentives and subsidies to make the industry more competitive.
The project is meant to be a ‘protective shield that will keep expanding’, the PM said. It is on the lines of the ‘Golden Dome’ announced by Trump, it is learnt.
Now that both IAF and PAF have made formal claims of having shot down the other’s aircraft in the 87-hour war in May, we can ask a larger question: do such numbers really matter?
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