Rising deficit: Government must do more than a mere delaration

RELATED ARTICLES

• Rs 53000 crore additional borrowing not to impact fiscal deficit: Pranab Mukherjee
• Debt Damage: Government to borrow Rs 53k crore more, shocks debt markets
• Government hikes FY12 borrowing plan by Rs 52,800 cr to Rs 4.7Lk cr
• India surprises with higher borrowing; yields surge
• Petrol prices hiked by Rs 3.14 per litre effective midnight

The government will borrow an extra Rs 52,872 crore from the market this fiscal due to a lower pool of small savings and a dip in its cash balances carried over from the previous year. It is not enough to declare that the government will meet its fiscal deficit target, regardless.

Concrete cuts in expenditure and additional revenue mobilisation must be announced. Of the extra borrowings, Rs 18,000 crore is due to a shortfall in small savings collections. This, in any case, was a government claim on private savings, even if not mediated by banks.

So, the additional, unanticipated demand from the government on private savings is for Rs 35,000 crore. Rightly, the announcement has raised concerns over interest rates hardening and crowding out of private investment. However, given the fragile state of the world economy, India cannot afford to slip on growth. Reforms are needed to maintain growth. One, the government should cut mounting fuel subsidies.

It must implement the decision taken, in principle, to deregulate diesel prices. This would keep fiscal deficit under check and stem inflationary expectations. It would release, for others, a sizeable amount of loans that oil companies secure now from banks to make up for under-recoveries - the difference between the claimed cost price and realised price.

Two, it should allow third parties, such as organised retail players, into oil marketing. An end to cartelisation in oil marketing will compel public sector oil companies to stop padding costs and lower claims on under-recoveries. Three, the government should also push for divestment even if the markets are depressed. Four, the tax base must be widened to raise more resources.

The way ahead is to implement the goods and services tax. With inflation close to double digits, the real returns from small savings are negative. Investors are, instead, betting on gold, an unproductive asset. The government could try to mop up at least the shortfall in small savings through new inflation-indexed bonds.

These could draw in investors in these volatile times. The political leadership must take time out from perpetual crisis management to attend to the needs of the economy.

http://economictimes.indiatimes.com/opinion/rising-deficit-govt-must-do-more-than-a-mere-delaration/articleshow/10191122.cms

Revised disinvestment target in November: Official

Going full throttle to woo SC and ST voters, chief minister Mayawati on Saturday wrote to Prime Minister Manmohan Singh demanding increase in quota for them as per their population and job reservation in the private sector and the judiciary.Our old friend UDIT Raj has been demanding Reservation in  the Private sector and Government response always seemed Positive. Justice Party Man Udit Raj raised the Issue during NDA Government at a time while Disinvestment Ministry was Instrumental for Privatisation. Udit Raj did NOT Oppose Disinvestment or Privatisation rather he tried to mobilise the Excluded Communities in favour of economic Reforms! Mayawati is doing the Same demanding Quota in Private Sector!A day after demanding constitutional amendment for introducing reservation for Muslims in government jobs and educational institutions, UP chief minister Mayawati on Sunday shot off a letter to Prime Minister Manmohan Singh seeking quota for poor members of the upper castes. Just see, how Mayawati Undermines the Constitutional safeguards Ensured by Dr. Ambedkar!BSP supremoMayawati shot off yet another letter to prime minister Manmohan Singh demanding inclusion of Jats in Central government's list of other backward classes (OBC). This is the third letter to prime minister from Mayawati in three consecutive days. It is the latest modification in her Social Engineering and Casteology!

On the other hand, as Bengali Brahamin Pranab heralded the latest agenda of Mass Destruction and Ethnic cleansing with his Budget commncing the Second Phase of Economic Reforms.The India Incs Government is Implementing Plan B to Push for Reform Drive and Divestment. Hence, the role of Mayawati who is Remote Controlled by the Brahaminical Hegemony, may NOt be judged only as a Electoral Equation of Casteology. It is Deeper Maning as the activities of Uditraj also suggest. Both of them, in fact, Supporting the Cause of Free market Economy and LPG Mafia Rule Manusmriti Apartheid, Justifying the PRIVATISATION! 

1. Revised disinvestment target in November: Official ‎ Zee News - 5 hours ago "Numbers (of companies which will go ahead with disinvestment) will be cleared ...Steel Authority of India Limited (SAIL) and Rastriya Ispat Nigam Limited ... Government to miss disinvestment target‎ Business Standard 9% growth in 12th plan realistic: Official‎ Hindustan Times all 15 news articles »

   Zee News

2. PSUs may be asked to buy back government equity: Finance Ministry ‎ Economic Times - 3 days ago Our aim is to achieve Rs 40000 crore (disinvestment target). ... The stock markets all over the world, including India, have been going through a rough ... Buy back or cross hold? Govt gets market jitters‎ Business Standard PSUs may be asked to buy back govt equity‎ Rediff Govt plans to ask cash-surplus PSUs to buyback their shares‎ mydigitalfc.com all 28 news articles »

   Indian Express

3. Fiscal deficit at R2.73 lakh cr in Apr-Aug ‎ Financial Express - 20 hours ago New Delhi: India's fiscal deficit stood at R2.73 lakh crore during ... R53,000 crore anticipating slower tax collections and lower disinvestment proceeds. ... Deficit surges twofold in Apr-Aug to Rs 2.7 lakh cr‎ Business Standard all 8 news articles »

   Moneycontrol.com

4. Coal Ministry asks Neyveli Lignite Corporation to seek board nod ... ‎ Economic Times - 2 days ago The government has set a disinvestment target of Rs 40000 crore for the current ...It offloaded equity in SJVN, Engineers India, Coal India, Power Grid and ...  BOM:513683

   Moneycontrol.com

5. Finance ministry orders overhaul of government's disinvestment ... ‎ Economic Times - 4 days ago ... India's biggest defence aviation company, and state-owned construction firm NBCC to the front of the disinvestment queue and do bulk sales of equity of ... Govt to put divestment plans on hold: Report‎ Zee News all 2 news articles »

   Zee News

6. Time to Sell Stakes ‎ Reuters India - Hugo Dixon - Sarah Bailey - 1 day ago India's rise in borrowing provides perfect excuse to push harder on ... never quite embraced the idea of privatisation, preferring to call it disinvestment. ...

   Business Recorder

7. Selloff in Ennore Port, Cochin Shipyard, DCI deferred ‎ Times of India - 15 Sep 2011 NEW DELHI: The shipping ministry has deferred its disinvestment plan for Ennore Port, Cochin Shipyard and Dredging Corporation of India (DCI) because of ... Cochin Shipyard, Ennore Port, DCI stake sale not in FY'12 ...‎ Economic Times all 8 news articles »

   Moneycontrol.com

8. Government's borrowing target a complete surprise for the markets ... ‎ Economic Times - 1 day ago Excerpts: ET Now: Are you a bit surprised with the tall claims of Government of India? They have increased the borrowing plan, disinvestment is not ...  LON:BARC

9. Government will be able to meet Rs 40000 crore disinvestment goal... ‎ NDTV.com - 13 Sep 2011 It offloaded equity in SJVN, Engineers India, Coal India, Power Grid and Shipping Corporation of India. The government has already approved disinvestment in ... Finmin to review ECB cap later this month‎ Financial Express all 15 news articles »

   Hindu Business Line

10. MoD clears 10 pc disinvestment in HAL ‎ Chandigarh Tribune - 12 Sep 2011 Sources said since HAL is key to Indian Air Force modernisation plans, thedisinvestment will have to be carefully calibrated. ... MoD okays 10 pc divesting in HAL‎ Deccan Herald Govt may divest 10% in HAL‎ Hindu Business Line HAL next in line of government's disinvestment framework‎ Military & Aerospace Electronics all 25 news articles »

    Hindu Business Line