Page 30 - Latest Updates on Fiscal Deficit
Fiscal prudence still matters
Govt will need to spend more, but should credibly commit through institutional reform to future transparency and prudence
 "Fiscal prudence still matters")
Combined Centre and state fiscal deficit may go up to 14%, says Subbarao
The former RBI governor also says that the Centre's current fiscal stimulus is not sufficient
 "Combined Centre and state fiscal deficit may go up to 14%, says Subbarao")
Putting an entire district in red zone makes no sense: Amarinder Singh
Centre-state relations during the battle against Covid-19 have caused cooperative federalism to come under massive stress, says the Punjab CM
 "Putting an entire district in red zone makes no sense: Amarinder Singh")
Pakistan's fiscal deficit to surge, tax revenue to miss target in 2020: FM
Fear of an economic meltdown is said to be the main reason behind ending the shutdown at a time when the country's curve, or rate of infections, is edging up sharply
 "Pakistan's fiscal deficit to surge, tax revenue to miss target in 2020: FM")
Covid-19 impact: State govts likely to raise more money using bonds
According to the Reserve Bank of India (RBI) data, state governments' gross market borrowings stood at Rs 6.08 trillion in 2019-20, up from Rs 4.78 trillion in 2018-19.
 "Covid-19 impact: State govts likely to raise more money using bonds")
Additional borrowing to widen fiscal deficit, but help govt perk up economy
He did not think that the move will crowd out borrowings of the private sector, saying demand of the government and the private sector are not contradictory in these circumstances
 "Additional borrowing to widen fiscal deficit, but help govt perk up economy")
Covid-19: US deficit could quadruple to $3.7 trillion; GDP to fall 40%
The CBO report illustrated the fiscal pressures lawmakers in Congress face as they prepare to craft new legislation to respond to the pandemic
 "Covid-19: US deficit could quadruple to $3.7 trillion; GDP to fall 40%")
Centre should use fiscal powers to ease state constraints: Yamini Aiyar
She says India needs to avoid another nationwide lockdown
 "Centre should use fiscal powers to ease state constraints: Yamini Aiyar")
Monetisation of govt's fiscal deficit by RBI is tricky, say economists
The RBI is kept out of directly monetising the government's fiscal deficit because it may give rise to unproductive spendings.
 "Monetisation of govt's fiscal deficit by RBI is tricky, say economists")
RBI unlikely to monetise Centre's fiscal deficit in first half of FY21
This, officials said, is because the bond market has factored in the Rs 4.88-trillion gross borrowing for April-September 2020
 "RBI unlikely to monetise Centre's fiscal deficit in first half of FY21")
Dangerous crossroads: Extraordinary steps have the habit of becoming habits
Printing money to fund crisis measures is not without risk; countries like the US might get away with it, but the price for excess is always greater for a developing country, writes T N Ninan
Monetising part of fiscal deficit inevitable: ex-RBI governors and experts
Monetising deficit means that the RBI purchases govt bonds directly in the primary market and finances this debt by printing more currency
 "Monetising part of fiscal deficit inevitable: ex-RBI governors and experts")
Covid-19: India must ease fiscal stance amid health emergency, says IMF
Once the current economic situation improves, a more ambitious, credible medium-term fiscal consolidation path is needed to bring debt and interest expenditure down, the report said
 "Covid-19: India must ease fiscal stance amid health emergency, says IMF")
PM hints at lockdown extension till Apr 30; industrial activity may begin
The motto of the government earlier was "jaan hai to jahaan hai", but now it is "jaan bhi jahaan bhi", the PM said
 "PM hints at lockdown extension till Apr 30; industrial activity may begin")
Creating fiscal space for the states
In the second part of a series, the authors say the current uncertainties require room for discretion to serve as a necessary handmaiden of rules that cannot alone cater to all contingencies
 "Creating fiscal space for the states")
Establish fiscal council to scale up spending
India will have to address the big fiscal prudence challenge, which is not captured by the fiscal deficit/GDP metric
Govt unlikely to grant any package for industry to pay workers' salaries
"The government lacks the fiscal space. It will not be feasible to give grants to the industry to take care of its wage bills," sources said.
 "Govt unlikely to grant any package for industry to pay workers' salaries")
Little option for govt other than amending FRBM Act to widen fiscal deficit
It has already exhausted the escape clause, which allows for a maximum deviation of 0.5% from consolidation road map
 "Little option for govt other than amending FRBM Act to widen fiscal deficit")
States can borrow Rs 3.2 trillion in April-Dec after discussions with RBI
The amount that the states have been given permission to raise through open market borrowings is a little more than Rs 3.2 trillion.
 "States can borrow Rs 3.2 trillion in April-Dec after discussions with RBI")
Covid-19 and Indian economy: Do please light your lamps as lights go out
After the health crisis, India's fiscal stress will increase as revenue falls and crisis-driven expenditure goes up; some key numbers may get worse than in the 2008 financial crisis, writes T N Ninan
 "Covid-19 and Indian economy: Do please light your lamps as lights go out")
