Page 5 - Fiscal Policy

The state of states: Have they really been fiscally profligate?

A couple of states may be guilty of fiscal imprudence. But why tar all of them with the same brush?

On high inflation, here is what RBI needs to tell govt: It is your fault

All the research since 1980 shows that loose fiscal policy causes inflation, and the RBI MPC needs to tell the govt just that

Act now to bring down inflation, safeguard financial stability: IMF Chief

The International Monetary Fund on Thursday urged policy makers across the world to act now to bring down inflation, put in place responsible fiscal policy, safeguard financial stability and carry reforms to address climate change, make digitalisation work for people and address inequality. Speaking to reporters at a press conference here, IMF Managing Director Kristalina Georgieva said, "The IMF is working with our 190 members on these issues. Our economic analysis is front and centre to help countries navigate this complex environment and avoid policy mistakes. Describing it as a difficult global environment, Georgieva said the world economy has been hit by one shock after another the coronavirus pandemic, Russia's invasion of Ukraine and climate disasters on every continent. They continue to harm people's lives and they have caused a cost-of-living crisis, she noted. The immediate toll is clear. On Tuesday, we cut our global growth forecast to 2.7 per cent in 2023. Across many .

13 states can incur capex worth Rs 7.4 trillion in FY23: ICRA report

Spending space available without pressure to their fiscal profile, says agency

56 mn Indians may have turned poor in 2020 due to pandemic: World Bank

"The global goal of ending extreme poverty by 2030 is likely to be missed: by then, about 600 million people will remain in abject poverty. A major course correction is needed," Indermit Gill said.

Mid-course changes in gas pricing to delay investments, says Reliance

Billionaire Mukesh Ambani's Reliance Industries has told a government-appointed panel reviewing gas pricing that any 'retrograde' move to artificially cap rates will add to fiscal policy instability, delays investment and dent India's attempt to become Atmanirbhar in fuel production. In a submission to the committee headed by Kirit Parikh, which has been asked by the Oil Ministry to look at setting a 'fair price to consumers', the firm detailed how the economics of its about-to-start field in the KG-D6 block, where billions of dollars have been spent to recover reserves lying several kilometres below the seabed, will be impacted under different prices. The mid-course changes through price caps not just go against pricing and marketing freedom contracts and government policy promises to companies but also add to uncertainty to a fiscal regime which would impact investments, according to sources briefed on the matter and the presentation. The government biannually fixes gas prices bas

Depreciating rupee not likely to cause fiscal slippage, say experts

Petroleum, fertiliser imports to become expensive, subsidy bill set to rise

Managing inflation can't just be left to RBI: FM Nirmala Sitharaman

'Monetary and fiscal policies have to work in tandem; importing Russian oil part of inflation management'

RBI should be more synchronised with fiscal policy to tackle inflation: FM

Finance Minister Nirmala Sitharaman on Thursday said the Reserve Bank will have to be more synchronised with the fiscal policy and other factors in taming inflation. Inflation management cannot be singularly left to the monetary policy, which has proved totally ineffective in many countries, she said at a seminar organised by economic think-tank Icrier. "The RBI will have to synchronise somewhat, may be not as much synchronised as other western developed countries would do. I'm not prescribing anything to the Reserve Bank... I'm not giving any forward direction to the RBI but it is the truth that India's solution to handling the economy, part of which is handling inflation also is an exercise where the fiscal policy, together with the monetary policy has to work," she said. There are economies where policy is designed in such a way that the monetary policy and the interest rate management is the one and the only tool to handle inflation, she said. "I would say India's inflation ..

The RBI MPC serves no purpose other than cosmetic and should be dismantled

There are two insurmountable hurdles in the path of RBI's independence on monetary policy. These hurdles make committees redundant

Policy tightening to pressure FY23 numbers, deficit seen at 6.7%: Report

The government has pegged the combined fiscal shortfall at 9.8 per cent of which the central deficit is seen at 6.4 per cent (down from 6.7 per cent in FY22) and states' at 3.4 per cent for FY23.

The rebalancing act

Excess policy accommodation will affect growth

Fiscal deficit will come down once revenues start to grow: Tarun Bajaj

Union Revenue Secretary Tarun Bajaj on Friday said that the country's fiscal deficit will come down once revenues start to grow. Speaking at a webinar organised by the Bengal Chamber of Commerce and Industry (BCCI), Bajaj said that the government had adopted a loose fiscal policy on the backdrop of increased capital expenditure. "The fiscal deficit at present is 6.9 per cent of the GDP. The target for 2025-26 is to bring down to 4.5 per cent. If we continue to grow our revenues, the fiscal deficit can come down by 0.1 or 0.2 per cent", he said. Next year, the targeted fiscal deficit is 6.4 per cent, Bajaj said, adding that the government had the opportunity to lower it further. "But increased capital expenditure by almost 35 per cent had forced us to keep the fiscal level at that level", he added. The Revenue secretary said since last year, the Centre had started giving money to the states for making capital expenditure. Unless this is done, the last mile infrastructure will not

Economic Survey 2021-22: India's agile fiscal policy response

The changing emphasis on capital expenditure throughout this period reflects a quick responsive fiscal policy

Budget should maximise capex, set stage for MPC to control inflation

Budget 2022: ICRA expects a satus quo on the stance of the monetary policy as well as the reverse repo rate in the upcoming meeting of the Monetary Policy Committee.

The fiscal-monetary tango

The pandemic years called for policy reinforcement; the post-pandemic aftermath will call for policy prioritisation

Economists urge gradual consolidation, see fiscal deficit near 6% in FY23

They believe focus on reviving informal sector activity, particularly construction, is key to reviving GDP and jobs

China Q3 GDP growth hits 1-year low, raising heat on policymakers

China's economy grew at the slowest pace in a year in the third quarter

Tax mix and rates in a low interest environment will change

Low inflation means at its best zero inflation, which is good. But low interest rates don't mean a zero rate because that would be bad

Central banks need self-awareness

'The Reserve Bank of India has a lot of experience in trying (and failing) to guide fiscal policy', says the author