Call Us Now

+91 9606900005 / 04

For Enquiry

legacyiasacademy@gmail.com

SHUNNING FISCAL ADVENTURISM

  • In the run-up to the budget, there was enormous pressure on the finance minister to launch a fiscal stimulus so as to pump-prime the economy
  • There is already considerable stimulus in the system.
  • The finance minister took a step towards transparency by admitting to off-balance sheet borrowings of 0.8 per cent of GDP for both the current and next fiscal year — acknowledging that the fiscal deficit would actually be higher at 4.6 per cent and 4.3 per cent of GDP respectively
  • Fiscal pressures will undermine the Reserve Bank of India’s struggle to revive investment by bringing down long-term interest rates
  •  It could result in a sovereign ratings downgrade and jeopardise efforts to attract foreign capital.
  • Can also stoke inflationary pressures
  • As much as the headline fiscal deficit numbers are a cause for concern, the underlying quality of fiscal consolidation is a bigger concern
  • Revenue deficit is actually going up
  • More than two-thirds of what the government is borrowing is going to finance current expenditures like salaries, pensions, interest payments and subsidies
Download PDF
September 2022
MTWTFSS
 1234
567891011
12131415161718
19202122232425
2627282930 
Categories