Ballooning subsidy and the great fudging behind it

Discussion in 'Economy & Infrastructure' started by sob, Oct 25, 2013.

  1. sob

    sob Moderator Moderator

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    With the report of the First Half, (H1) of the economy is due to be relaesd in early November, situation continues to be grim.

    Almost 75% of the annual budgeted subsidy has been used in Q1 and Q2, and with elections round the corner there does not seem to be any hope on curtailing the subsidy balloon.

    OTOH the Finance Minister has been repeating that the Deficit would not cross the 4.8% of GDP mark. He has called it the red line. But with all indicators are showing that FM has to do large scale cosmetic dressing up to meet his budgeted targets. Similar to last year the Government proposes to drastically cut down on expenses and to roll over part of the subsidy bill to the next year.

    Reports are out in the media that the FM will be rolling over US $ 15 Billion of subsidy bill to he next financial year. In Rs. terms it is about Rs. 90,000 Crores. This will be putting an enormous strain on the new Government next year.

    Exclusive – India eyes $15 billion rollover of subsidy costs into next budget | Firstpost

     
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  3. sob

    sob Moderator Moderator

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    From the same article

    This has been exploited to the full by our Hon President in his previous avatar as the Finance Minister of India.

    But the biggest worry will be the cut in planned expenditure. Last year nearly US $ 16 Billion planned expenditure was cut by the Finance Ministry to meet the deficit targets and the a similar or larger figure may be repeated this year.

    Now we now why the Govt. did not sign for the M 777 guns and why the MRCA deal is not being finalised.
     

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