Fiscal Policy

India’s projected 6.3-6.5 percent growth from 2023 to 2026, as estimated by the World Bank, might seem modest compared to its recent history. Yet, this positions India among the world’s fastest-growing economies and underscores its growing influence globally. The country’s economic resilience can be attributed to the government’s sharp focus on capital expenditure, relying on the assumption that higher public investment in infrastructure projects will unleash significant economic benefits. This, coupled with the spending power of Indian households, is expected to play a pivotal role in steering not only India but also the global economy through the current challenging times. The crucial challenge for the government is fostering a policy environment to sustain India’s attractiveness to foreign and domestic investors. Moneycontrol presents the Moneycontrol Manifesto.

Budget 2024: Striking a balance between growth and fiscal prospects

The scope for reducing revenue expenditure growth may be limited since it is already quite low. The main adjustment will have to be on the side of capital expenditure growth 

Fitch was right: political dysfunction and reckless fiscal policy impair US debt

The dismissive reaction to a US downgrade was revealing. Fiscal trends and broken politics shouldn’t be discounted

India remains 'bright spot', to contribute 15% of global growth in 2023: IMF MD

While digitisation pulled out the world's fifth-largest economy from pandemic lows, prudent fiscal policy and significant financing for capital investments provided in the next year's budget will help sustain the growth momentum.

Indian states’ outstanding liabilities rise 43% since pandemic, ringing alarm bells

The states' outstanding debt burdens have spiked considerably since the Covid-19 pandemic hit, with Madhya Pradesh topping the rise with a 79% jump. This is a cause for concern as refinancing this debt over coming years will keep interest rates in the economy high.

Budget 2023 | Centre confident of meeting Rs 10-lakh-cr capex target: Finance Secretary Somanathan

The Budget has set out a new record capital expenditure target for 2023-24 as the government continues its investment push to boost the economy

Budget 2023: How much do people know about fiscal policy? | Street View

As the Union Budget is just around the corner, we hit Delhi streets to test people's knowledge about some key terms related to the Budget. So let's see how much Delhiites know about the fiscal policy

Budget 2023: Time to think big and act bold on tax

Budget 2023: Tax policy will play a key role in driving manufacturing competitiveness, revitalising special economic zones, boosting investor confidence of non-residents, says Naveen Aggarwal from KPMG

States should focus on sustainable policies, infra creation, says RBI report 

The central bank also flagged concerns on states reverting to the old pension scheme. 

Govt hikes interest rates on some small savings schemes by 20-110 bps for January-March

The Centre had increased the interest rate by up to 30 basis points for October-December after leaving them unchanged for nine consecutive quarters.

Budget 2023: Govt may target fiscal deficit of 5.7-5.8%, unlikely to cut income-tax rates, says Elara Capital’s Garima Kapoor 

Budget 2023: The capex cycle in select sectors could sustain despite the weakening global economy as the drivers are policy driven, says the economist.

Budget 2023: Govt must shift focus to lowering fiscal deficit to 3%, says former finance secretary Garg 

The government deserves praise for cleaning up the fiscal Augean Stables but needs to recommit itself to the path of lowering the fiscal deficit to the Fiscal Responsibility and Budget Management (FRBM) Act’s target of 3% of GDP, says Subhash Chandra Garg

Most states seeking return to old pension scheme are in bad shape financially 

States including Rajasthan and Jharkhand have asked the central government to return the corpus collected under the New Pension Scheme. However, the Union finance ministry says there is no provision under which the corpus can be returned. 

Centre seeks to roll back states’ ability to borrow more

States’ borrowing, including those to undertake power sector reforms, is likely to be capped at 3.5% of their gross domestic product for the fiscal year starting April 1.

Govt will focus on capex, keep allocation for subsidies: Goldman Sachs economist

Santanu Sengupta expects the Reserve Bank of India to raise the key policy rate by 50 basis points at its upcoming meeting

GST collections rise to Rs 1.52 lakh crore in October, second highest ever

Goods and Services Tax mop-up has been over Rs 1.40 lakh crore for eight months in a row.

Risk of fiscal dominance high in UK, Eurozone, low in US

Fiscal dominance implies a situation where a central bank needs to hold interest rates low to keep the government’s borrowing costs manageable

Growth to be sustained, inflation pressures to subside, says finance ministry report

The finance ministry is hopeful that robust growth in government revenues will help sustain capital expenditure through the rest of the fiscal year.

CSEP calls for more comprehensive and integrated public finance management system

Governments need to be held accountable for their decisions regarding spending and revenue, the paper said.

RBI confident of handling policy without major blips, says Sitharaman

India has been able to lower inflation to manageable levels in the last couple of months, the finance minister has said

Top central bankers deliver a hawkish message at Jackson Hole

Policy makers in Europe and the US, battling the hottest inflation in decades, are resolutely raising rates and pushed back against suggestions they will waver if their economies falter while price pressures remain too high

Central banks will fail to tame inflation without better fiscal policy, study says

If monetary tightening is not supported by expectation of appropriate fiscal adjustments, the deterioration of fiscal imbalances will cause even higher inflationary pressure, says a study presented at Jackson Hole

Easing commodity prices, RBI, govt measures to cap inflationary pressures in coming months: Fin Min

The sustained decline in crude oil prices and decline in inflation below 7 percent, as well as growth in tax collection have contributed to a significant easing of concerns over growth and inflation in the current financial year

States resume fiscal consolidation, set to control deficits, paper says

States have also taken into account fiscal implications of the end of GST compensation regime in the budget estimates of 2022-23, according to the NIPFP paper.

Finance minister reiterates all states agreed with recent GST Council decisions

“I take extreme pride to say that Council has applied its mind at various levels,” Nirmala Sitharaman said.