Page 3 - Fiscal Policy

Centre must be concerned with fiscal mismanagement of states: Supreme Court

Fiscal mismanagement by states is an issue the union government has to be concerned about as it impacts the nation's economy, the Supreme Court observed on Wednesday and advised the Centre and the Kerala government to iron out their differences a cap on net borrowing by the southern state. The apex court made the observation while it was hearing a suit filed by the Kerala government accusing the Union of India of interfering in the exercise of its "exclusive, autonomous and plenary powers" to regulate the state's finances by imposing a ceiling on borrowing. The dialogue between the Centre and the state must not stop merely because of the pending suit, the court said while stressing on the need to resolve the issue. "Let all the senior officials who are capable to take decision and who are already involved in decision making sit together and resolve this," a bench of Justices Surya Kant and K V Viswanathan said. The Kerala government had told the top court on February 19 that a ...

External exposure

Foreign flows will demand strong fiscal management

White Paper on Indian economy tabled: Tracks 'Fragile 5' to 'Top 5' journey

Within hours of Prime Minister Narendra Modi praising his predecessor Manmohan Singh in the Rajya Sabha, the White Paper criticised almost all aspects of the UPA rule under Singh

India's Interim Budget represents responsible fiscal management: USISPF

Commending Finance Minister Nirmala Sitharaman for her consistency and focus on growth in her interim Budget, a US-based India-centric business advocacy group has said that it represents a welcome statement of responsible fiscal management in an election year. The US-India Strategic and Partnership Forum (USISPF) also commend the government's continued focus on the trinity of infrastructure, inclusive growth, and fiscal prudence in line with growing US-India commercial ties. The interim Budget was presented on February 1 by Sitharaman. As an interim, pre-election budget with no major policy pronouncements, it represents a welcome statement of responsible fiscal management in an election year, the USISPF said in a statement. General elections are expected to be held in India between April and May. According to budget projections, the fiscal deficit for the upcoming financial year (2025) will narrow to 5.1 per cent and GDP growth will remain between 6-7 per cent GDP. On the expendi

Interim Budget: Gross market borrowing music to ears of bond market

In the current year, the gross market borrowings are estimated at Rs 15.4 trillion, and the net borrowing at Rs 11.8 trillion - the highest-ever government borrowing programme

Interim Budget 2024-25: 'Commitment to fiscal prudence and growth'

India has emerged as one of the most preferred destinations for global investors

Interim Budget 2024: 'A transformative yet prudent financial statement'

Overall, the government has presented a forward-looking Budget with enough assurances to trust it to lay down the roadmap through the full Budget and sticking to GDP

Interim Budget: 'Fiscally prudent, growth-promoting pronouncement'

The underlying nominal GDP growth assumption of 10.5 per cent for the Budget and tax collection estimates are realistic

Macro balancing act in 2024

The imperatives for 2024 are more nuanced: Nurturing recovery while ensuring public debt is stabilised and financial exuberance contained

Kerala criticises Centre's fiscal approach, notes low alcohol tax revenue

The Kerala Government on Thursday criticised the BJP-led Centre's fiscal approach towards the state, noting that the state had to seek a solution to the financial impasse in the Supreme Court. The state government also clarified that only 3.7 per cent of Kerala's own tax revenue comes from alcohol, which is one of the lowest percentages among all states, contrasting with those where it can be as high as 22 per cent. These were part of the customary policy address which was presented before the State Assembly by Governor Arif Mohammed Khan. Khan swiftly concluded the address by reading out only its final paragraph. "My Government places the considered opinion before the Union Government that Kerala should be ensured it's well deserved share in the distribution of taxes. My Government views with concern the holding back of eligible grants and share of assistance in Centrally Sponsored Schemes. "My Government is put to added liquidity stress because of the retrospective cut in borrowi

Fiscal policy reset

Faster consolidation will require expenditure adjustments

Budget 2024 expectations: What stance will interim Budget 2024 adopt?

Nirmala Sitharaman's recent statement that the February 1 Budget would just be a vote on account could mean that she will uphold the convention surrounding an interim Budget

PLI payout for FY24 may lag behind govt's estimate of over Rs 11,000 crore

Ministries asked to ensure scheme is 'aggressively' monitored

Will interim Budget 2024 revive demand and investment?

The interim Budget 2024-25 on February 1 will likely see the central government boost investment, while still sticking to the fiscal consolidation path

Union Budget 2024: 10 terms to boost the know-how of key financial exercise

The Union Budget, laid out on February 1 annually, is the financial roadmap that shapes the country's economy. Here are 10 key Budget terms for better insights into the key financial exercise

Govt's prudent fiscal policy to support economic growth: FinMin review

The FinMin report also highlighted that the relatively stable Indian rupee against the US dollar and other prominent currencies, and adequate foreign exchange reserves, add to the optimism

Positive outlook

High public debt remains a risk

States to boost fiscal health in FY24 with high revenue, capex: RBI report

The proportion of states' revenue in gross state domestic prod­uct (GSDP) is projected to reach 8.2 per cent in FY24, the highest sin­ce 2018-19

Populism: The only game in town

As political parties indulge in competitive populism, why do voters accept it?

GST regime altered contours of fiscal federalism in India: Debroy

The Goods and Services Tax regime has altered the contours of fiscal federalism in India, and steady growth of GST revenue is a robust barometer of the reform's success, Economic Advisory Council to the PM (EAC-PM) chairman Bibek Debroy said. In a working paper titled 'How the Pennies Drop: What GST revenue data tells us and What it doesn't', Debroy also proposed constructing a GST Rate Index to help track relative movements of the tax rates and get a sense of how it impacts tax collections and taxpayer behaviour. "The introduction of a Goods and Services Tax (GST) in India in 2017 not only impacted the economy but it also altered the contours of fiscal federalism in India. "Amongst others, the steady growth of GST revenue has been a robust barometer of the success of the reform," he said. Debroy also suggested a novel mechanism for computing the collection rate of GST, using only publicly available data, saying this has potential applications in revenue modelling; analysis of tren