Page 3 - Fiscal Consolidation

Fiscal focus

Govt must aim for faster consolidation

MPC member Ashima Goyal says no time for aggressive fiscal consolidation

The government should not go in for an 'aggressive fiscal consolidation' in the upcoming budget as global risks have not abated, RBI Monetary Policy Committee (MPC) Member Ashima Goyal said on Wednesday. Goyal further said subsidies are expected to come down as food and energy inflation moderates. WPI inflation in food articles in November was 1.07 per cent against 8.33 per cent in the previous month. In the 'fuel and power' basket, inflation was 17.35 per cent last month. "Given fears of a global slowdown, this is not the time for aggressive consolidation. Sticking to small pre-announced steps on the path will minimise growth sacrifice, while moderating demand and the current account deficit, thus lowering the risk premium that keeps spreads high and raises the cost of government and private borrowing," she told PTI. India's fiscal deficit, the gap between expenditure and revenue, is projected to come down to 6.4 per cent in current fiscal ending March 2023, from 6.71 per cent in .

IMF calls for 'more ambitious' fiscal consolidation by India, cites risks

But govt asserts public debt is sustainable

India's fiscal consolidation trend intact; to see strong revenues: Moody's

Moody's Investors Service on Tuesday said the trend of gradual fiscal consolidation remains intact for India and going forward the country will see strong revenue performance and debt stablisation. Moody's Investors Service Senior Vice President Christian de Guzman said India's 'Baa3' sovereign rating balances its strength of relatively high economic growth and weakness of one of the most highly indebted emerging market sovereigns. The country's healthy financial system is reflected in deleveraging by Indian corporates. "We expect that India is going to be the fastest growing G-20 economy next year... (but) high inflation pose a downside risk to India's growth as households and businesses have less purchasing power," Guzman said in a Moody's virtual event 'Sovereign Deep Dive'. Moody's had earlier this month cut India's growth projection for 2022 to 7 per cent, from 7.7 per cent projected earlier. It expects growth to decelerate to 4.8 per cent in 2023 and then to rise to around 6.4

Fiscal consolidation today

Mercifully, India has been spared the problems that foreign currency sovereign debt would have posed

Best of BS Opinion: Labour market distress, fiscal consolidation and more

Here is the best of Business Standard's opinion pieces for Wednesday

Fiscal consolidation: States lack the flexibility that the Centre enjoys

While the Centre has an escape clause to deviate from the fiscal consolidation road map by 0.5 percentage point of GDP in times of exigency, states were not given any such escape clause

2-6% inflation target works well, no need to tinker with it: Sanjeev Sanyal

In a Q&A, the finance ministry's Principal Economic Advisor also explains why he thinks the latest Budget is extraordinary

Govt may have to apply brakes on existing fiscal consolidation road map

Centre may have to amend FRBM Act once again to achieve this, which isn't an issue as such an amendment does not require a two-third or three-fourth majority

Ease fiscal consolidation in Budget, hike health spend, economists urge FM

Also call for efforts to enhance exports, build farm infrastructure

Winding down liquidity to be challenge for RBI going forward: Subbarao

Ex-RBI governor says road map for fiscal consolidation starting 2022 would be prudent. Though expansionary fiscal policy is a pressing need, govt spend on health and education would benefit economy

A three-pronged strategy

Lay out a credible fiscal consolidation plan, reverse tax buoyancy decline, and boost non-tax revenues

Why fiscal rules should be revisited

According to the revised FRBM rules, as amended by the Finance Act, 2018, the central government debt stock should not exceed 40 per cent of GDP by the end of financial year 2024-25

Budget 2020: Fiscal consolidation hinges on revenue, says Aditi Nayar

Although, a gross tax revenue expansion of 12 per cent seems reasonable in light of the 10 per cent growth expected in the nominal GDP in FY20-21, the revenue assumptions made for FY20 seem aggressive

Tight-fisted Budget leads to capex squeeze, and it's not surprising anymore

The share of capital expenditure has shown a declining trend over the last twenty years

Tight-fisted Budget leads to capex squeeze, and it's not surprising anymore

The share of capital expenditure has shown a declining trend over the last twenty years

Budget 2019 to boost investments without any comprise in fiscal goals: FM

Replying after a general discussion on the Union Budget 2019-20 in the Rajya Sabha, the minister said, 'Comprehensive steps' have been envisaged for the next 10 years.

Budget 2019: Fiscal goals to welfare, DBS lauds mix of continuity, change

Credit flow is likely to return to the NBFCs once the asset-liability mismatch has been tended too, with banks, meanwhile, likely to come back to the fore," said economist Rao at DBS group research

Keeping the focus on fiscal consolidation

India has to compare its tax rates not with the more developed economies but with the ones that are closer home

N K Singh bats for keeping a check on the Centre's fiscal consolidation

Singh had recommended the fiscal road map for the Centre and states