Latest news with #FiscalResponsibilityandBudgetManagement
Mint
3 days ago
- Business
- Mint
India's GDP: A key test lies ahead
The fiscal policy-led rescue of India's economy from the covid shock has been impressive, even though its pace of expansion slowed to 6.5% in 2024-25, as provisional data shows, after a three-year run averaging above 8.8%. Last year's rate of GDP growth dropped below the path demanded by Viksit Bharat, but the second half's acceleration reveals a grip on its gear-stick held by the government through public expenditure. How long, though, will state support last? Also Read: Kaushik Basu: Redefine prosperity; GDP tunnel-vision could prove costly Last year's fiscal gap was under 4.8% and this year's 4.4% goal is achievable. After that, public debt will be adopted as the official gauge to constrain risky over-spending. Also Read: It's time to lay the great Indian GDP controversy to rest Clearly, India's Fiscal Responsibility and Budget Management (FRBM) law needs rework in the light of lessons from our economic recovery. How 2025-26 turns out may be instructive. If inflation stays subdued at around 4%, the central bank's aim, even with the fiscal deficit exceeding the FRBM's 3% cap, it'll be a relief. Also Read: The state of India's economy is not as bright as GDP data may suggest What happens to price stability if private investment and consumption regain full strength, however, remains untested. It's a key test, as faster growth and lower debt require both these to form a robust mutually reinforcing loop.
Time of India
21-05-2025
- Business
- Time of India
Kerala not caught in debt trap, says finance minister Balagopal
Finance minister K N Balagopal on Wednesday rejected allegations that the state is caught in a debt trap, terming them politically motivated and factually incorrect. Balagopal told a news conference that the state's borrowings were well within the limits prescribed by Fiscal Responsibility and Budget Management (FRBM) Act and undertaken with Centre's approval. "We're only borrowing as much as required for development and welfare. In fact, our borrowings are lower than the ceiling set by Centre," he said. He said Kerala is permitted to borrow up to 3.5% of its Gross State Domestic Product (GSDP), but borrowed only 2.5% in 2022-23 and 2.99% in 2023-24. "Even the borrowing we were entitled to was curtailed by Centre," he said. Balagopal presented data to show that the state's debt-to-GSDP ratio declined steadily, from 38.47% in 2020-21 to a projected 33.9% in 2024-25. "This is evidence of improving fiscal health," he said. He acknowledged that total debt rose from Rs 2.96 lakh crore in 2020-21 to Rs 4.31 lakh crore in 2024-25. However, he said the GSDP expanded from Rs 7.79 lakh crore to Rs 12.75 lakh crore during the same period. "Our debt has not grown disproportionately. The size of our economy has increased significantly," Balagopal said. He also criticised the previous UDF govt. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Secure Your Child's Future with Strong English Fluency Planet Spark Learn More Undo "Between 2011 and 2016, GSDP growth was 11.6%, but debt grew at 14.9%. In contrast, under the present LDF govt, GSDP has grown at 13.5% and debt at only 9.8%," he said. Balagopal said the state's debt traditionally doubled every five years. "Following that trend, our total liabilities should have touched Rs 6 lakh crore by 2025-26. But thanks to tighter control and a more responsible borrowing policy, they are expected to remain around Rs 4.65 lakh crore," he said. "Even that would have been lower, had Centre not withheld funds we were legally entitled to borrow." Balagopal said Rs 3,300 crore was cut from Kerala's borrowing limit for providing guarantees to loans taken by PSUs, with Centre citing the Guarantee Redemption Fund (GRF). "Centre is now demanding that we earmark 5% of the total guarantees — worth around Rs 80,000 crore — as reserve in the GRF. This is an additional burden," he said.
Hans India
21-05-2025
- Politics
- Hans India
Lax implementation of Central schemes in TG: Ex-MLA to FM
Hyderabad: Former MLA and BJP State Vice-President NVVS Prabhakar criticised State Chief Minister A Revanth Reddy for failing to provide the necessary matching grants for Central government schemes in Telangana. He stated that despite Reddy's repeated claims about supporting federal principles, the implementation of these schemes has been undermined by changing their names and diluting their effectiveness. Prabhakar addressed the media in the national capital on Tuesday, accusing the Congress government in Telangana of betraying the people by not effectively implementing Central government initiatives. Earlier, he met with Union Finance Minister Nirmala Sitharaman to discuss several pressing issues, including the status of the Awas Yojana, Fasal Bima Yojana, Ayushman Bharat, PM Kusum Yojana, and funding for local bodies, gram panchayats, and municipalities from the Central Government Finance Commission. During the meeting, he informed the Finance Minister that the State's financial situation is worsening daily. He pointed out that the State government is unable to raise new debt because it has surpassed the limits set by the Fiscal Responsibility and Budget Management (FRBM) Act.
