Fiscal Balances of Centre and States Show Progressive Improvement Despite Increased Public Investment: Economic Survey 2024

-

 According to the Economic Survey 2023-24, public investment in fiscal balances of central and state governments leads the increase, yet the fiscal balances of both central and state governments have shown progressive improvement. Better tax collection through improvement in the procedures, decrease in expenditure and digitalization of financial services incorporating these steps have resulted in the balance of the economy which beer was reported in the Economic Survey 2023-24 showed that, Nirmala Sitharaman, Finance Minister, made a presentation before the parliament about it on Monday. However attenuated global demand for the goods has brought the external balance at pressure, but strong performance in service exports has more than compensated for the loss. The pre-Budget document showed that the world output is somewhat more shatterproof than in 2022, moreover, there is no longer any sign of global inflation, and the probable return of trade, subject to the positive risk of political conflict, and no new opposition blockades.

Still, the survey also highlighted an increased understanding that there is a boost of potential geopolitical problems as well as conflicts in recent times.

The Government of India worked out the pandemic crisis by means of its three main constituents, which the survey mentions.

"Through the focus on public infrastructure spending, the economy picked up by creating many jobs and increased industry output, and it even triggered an unexpected but strong positive reaction by private investment." as stressed by the survey. The second one is the strengthening of private sector balance sheets in both financial and non-financial sectors which were backed by a decade of government and central bank functioning it described.

Overall, as per the survey, the combination of both developments had some effect in that the economy was recovering steadily and growing smoothly for the last three years.

The survey shows that real GDP in FY24 was 20 percent more than what it had been in FY20, an outstanding accomplishment among major economies, and the prospects for strong growth in FY25 and, subsequently, are very positive.

"Growth has been inclusive with the labor force participation having increased, whereas unemployment and multi-dimensional poverty levels have declined," they mentioned, admitting that the broader-based and inclusive growth they had in mind, was already in effect.

The study found that the first quarter of FY23 came with a mixed set of problems for India, as the prices increased by the war in Europe and the Current Account Deficit (CAD) expanded due to spiking oil costs.

Most of the central banks across the globe imposed high policy rates to control the strength of inflation. Nevertheless, the survey underscored the point that it was of paramount importance to the macroeconomic stability of FY23 and FY24, as a means of chasing after economic growth in times of internal and external brittleness.


Comments

Post a Comment

Popular posts from this blog

Easing inflation will indeed give boost to economic growth.

-
Image
CPI clocked to 3.34% in March after 6.1% in February, even below the consensus estimate of 3.46%. This was the lowest inflation recorded since August 2019. Wholesale inflation also fell to a six-month low at 2.05% in March. This was the lowest for retail inflation indeed. Can this be a time when the government, together with fiscal policy, and the central bank with the monetary policy, hit the sweet spot? The headline GDP growth rate was at 6.3%, which is amongst the highest among the leading nations. Real GDP growth also clocked at 9.7%. RBI is taking many proactive steps to boost growth at this time. A part of the discussion is that the RBI has already cut repo rates by 25 bps, and there are skeptics hovering around that the RBI may further reduce the rate by 50 bps each in the months of June and August. This move by the RBI not only depicts clear mindsets but also the potential leverage they are trying to apply during this time of global turbulence in the geoeconomy. Easing in the ...
Read more

Navigating India’s Debt Sustainability Amid Growth Headwinds

-
Image
  Aviral Akshat 1 , Chellsea Lauhka 1 , Poulami Sarkar 1 aviralakshat.iitd@gmail.com, chellsea.lauhka31@gmail.com, poulamisarkar343@gmail.com 1 Indian Institute of Technology, Delhi As India enters the mid-2020s, its fiscal outlook is drawing increased scrutiny. Public spending surged in the aftermath of the global pandemic, pushing up both central and general government debt-to-GDP ratios. These trends have sparked concern in policy circles and among international observers. The International Monetary Fund (IMF) has warned that under adverse conditions, general government debt could be near 100% of GDP by FY2027–28 —particularly if climate-related investments rise without matching revenue efforts. Meanwhile, provisional GDP estimates for FY2024–25 show a slowdown to 6.5%, the weakest growth since the pandemic year of 2020–21. This mix of softening growth and elevated debt highlights the challenge of maintaining fiscal discipline while ensuring sustained public investment—both ess...
Read more

Outward remittances over ₹6 lakh are subject to scrutiny by the Income Tax Department.

-
The Central Board of Direct Taxes (CBDT) has initiated a thorough examination and verification of high-value outward remittances exceeding ₹6 lakh to uncover discrepancies and potential misuse. This action follows the discovery of cases where foreign remittances and expenditures did not match the income declared by individuals, along with lapses in tax collection at source (TCS).  The CBDT has instructed field formations to begin verifying and scrutinizing Form 15CC— a quarterly disclosure statement of outward remittances submitted by authorized dealers. Data from Form 15CC, collected since 2016, will now be available for analysis. A senior official revealed that this comprehensive review, recommended last year, will soon be available for the first time to field formations. This initiative aims to identify undeclared income and prevent tax evasion while ensuring legitimate remittances are facilitated. The CBDT plans to create a list of high-risk cases based on data from 2020-21 onw...
Read more