Fiscal Health

States must urgently push for debt consolidation, create capex buffers

Most states are likely to be in better fiscal health this financial year as 20 of them are collectively carrying forward Rs 2.6 lakh crore borrowed in FY21 to this fiscal, says a report. This also explains why the states have been borrowing less so far this year despite the pandemic-driven revenue crunch and the soaring public expenses towards health and food, as per the Icra Ratings report released on Friday. Given the pandemic and the resultant financial crunch, the Centre allowed states to borrow up to 5 per cent of their gross state domestic product (GSDP) -- resulting in an aggregate borrowing of Rs 8.5 lakh crore -- in FY21 as they faced massive drop in revenues and higher expenses towards supporting the people hit by the lockdowns. As of August 10, when the state debt was auctioned last, the borrowings by the states so far in FY22 has been 11 per cent less year-on-year and 15 per cent lower than the amounts shown in the indicative auction calendar. A total of 23 states and .

India is among the 11 emerging markets (EMs) that have jumped on the QE bandwagon

Govt's total receipts during April-February stood at Rs 14,13,096 cr or 88.2% of the revised estimates presented in the Budget on Feb 1

If the Finance Commission recommends a smaller tax share for states, the Centre will get more money. On what that would do to 'cooperative federalism', you don't need to guess, writes T N Ninan

The fragility of central government finances is partly legacy, part refusal to acknowledge and address the problem due to the lack of strategic vision and poor institutional capability

The problem is on both revenue and expenditure sides - the former is shrinking in relation to GDP, and the latter is rising despite a sharp drop in petroleum-related subsidy bills - writes T N Ninan

Here's a selection of Business Standard Opinion pieces for the day

The coronavirus pandemic may wipe out all the gains made in poverty alleviation in South Asia, says World Bank

"We have decided to constitute a fiscal committee, which will address one particular recommendation contained in our terms of reference regarding a legal framework for the fiscal architecture," Singh

The government's numbers on expenditure and receipts in the first half of the current year do not fully reveal the stress in its finances

If we go on being inward-looking, how will the system open up? Those that are not competitive locking competitive ones out of markets cannot be a way to get to the $5-trn dream, writes T N Ninan

Though the figure seemed alarming, it was bit lower than 95.3 per cent in the corresponding period of 2018-19

Greater clarity and caution from the finance ministry is needed

Centre's deficit has narrowed from 6.5% of the GDP in 2009-10 to 3.5% in 2016-17