Page 15 - Latest Updates on Fiscal Deficit
Borrowing limit raised, but states won't rush to make use of the chance
Only eight states will qualify for the extra borrowing, as they have to meet stiff conditions on ease of doing business.
 "Borrowing limit raised, but states won't rush to make use of the chance")
Post stimulus, fiscal deficit of Centre, states to be at 12% of GDP: Report
In the case of states, the fiscal gap will rise by 200 bps after the Centre hiked the borrowing limit of states to 5 per cent of GSDP on Sunday
 "Post stimulus, fiscal deficit of Centre, states to be at 12% of GDP: Report")
Higher borrowing can see FY21 combined fiscal deficit hit 12%: Economists
Net borrowing ceiling for 2020-21 was earlier pegged at Rs 6.41 trillion (3 per cent of gross state domestic product), and the states have thus far borrowed merely 14 per cent of this authorised limit
 "Higher borrowing can see FY21 combined fiscal deficit hit 12%: Economists")
Govt's fiscal cost could be less than 11% of total economic package
Not all of this amount will necessarily be borne in fiscal year 2020-21
 "Govt's fiscal cost could be less than 11% of total economic package")
Fiscal stimulus by FM is mostly credit oriented, says Subhash Chandra Garg
He said that the fiscal stimulus, by its very nature, is additional fiscal burden on the public finances
 "Fiscal stimulus by FM is mostly credit oriented, says Subhash Chandra Garg")
Expect a stimulus, even at the cost of high fiscal deficit: Venu Srinivasan
The government has given loans and ensured that companies, SMEs in particular, dont sink due to the crisis
 "Expect a stimulus, even at the cost of high fiscal deficit: Venu Srinivasan")
With Rs 20-trn package, fiscal deficit to balloon to 7.9% in FY21: Report
"We estimate a 4.5% direct impact on fiscal deficit purely because of revenue shortfall / automatic fiscal stabilizer and a 0.9% indirect effect because of GDP change," the SBI report says
 "With Rs 20-trn package, fiscal deficit to balloon to 7.9% in FY21: Report")
FM's Day 2 package: Govt's immediate fiscal cost will be close to Rs 10K cr
The direct spending by the centre, on Thursday's announcements will include Rs 3,500 crore that the centre will spend on providing free foodgrains to 80 million migrants
 "FM's Day 2 package: Govt's immediate fiscal cost will be close to Rs 10K cr")
Rupee drops by 19p to 1-wk low against dollar on fiscal deficit concerns
Domestic stocks advanced in early trade which supported the rupee. The key indices Sensex and Nifty, however, closed marginally down due to sell-off in financial counters
 "Rupee drops by 19p to 1-wk low against dollar on fiscal deficit concerns")
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.
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
