FISCAL CONSOLIDATION

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• Covid Speed Read: Unlock 5.0 guidelines extended till Nov 30; RBI says Covid to erode 3 yrs of states' fiscal consolidation gains

  On Tuesday, the Ministry of Home Affairs (MHA) extended the Unlock Phase V guidelines till November 30, keeping cinemas, theatres and multiplexes operating at 50% capacity. The health ministry said that the centre is fine tuning plans for nationwide vaccination and asked states to wait for final policy announcement. Reserve Bank of India believes that the states will likely lose three years of fiscal consolidation gains due to the Covid-19 outbreak. ETCFO brings these updates and more.

  

• India faces continued fiscal challenges, despite lower deficit target: Moody's

  "Weak growth prospects for India (Baa2 stable) will complicate the government's fiscal consolidation efforts, weighing on the sovereign's credit quality," Moody's said.

  

• India's rating hinges on policies of new govt: Moody's

  Moody's expects the broad push towards fiscal consolidation to remain, although with greater policy emphasis on supporting low incomes, Foster added.

  

• Fiscal slippage for two consecutive years credit negative: Moody's

  In light of these budget measures, the govt announced slippage from its original fiscal deficit targets to 3.4 per cent of GDP both for the fiscal years ending in March 2019 and March 2020.

  

• IMF suggests India three steps to sustain high growth rate

  India's growth accelerated to 7.7 per cent in the fourth quarter of Financial Year (FY) 2017-18. That was up from 7 per cent in the previous quarter.

  

• Fiscal deficit will be maintained at 3.3 % for FY19: Official

  "No impact of fiscal deficit. (Finance) Minister has also gone on record and said there is no impact on fiscal deficit. We keep it 3.3 per cent.. PM ( Prime Minister Narendra Modi) has also said that in his Bombay meeting.

  

• 'No expenditure cut in FY18 to meet fiscal deficit target'

  Expenditure Secretary Ajay Narayan Jha said that buoyancy in revenue comes in the last two months of the financial year and fiscal deficit numbers will remain well within the revised target.

  

• Fiscal consolidation: Finance Commission invites suggestions from stakeholders by June 30

  The 15th Finance Commission has invited suggestions/views on issues related to the terms of reference from the members of the general public, institutions and organisations.

  

• India should be 'wooden-headed' about fiscal consolidation: Duvvuri Subbarao

  He cautioned that every time finance ministers hit the "pause" button on fiscal consolidation, whether it is the UPA government or the NDA government, they have justified it on the ground that "this time is different".

  

• RBI flags delay in fiscal consolidation

  "Significant and postponed deviations from them (fiscal targets) would make matters more challenging going forward," Governor Urjit Patel said.

  

• 'Govt may not alter fiscal consolidation targets in budget'

  The estimated GDP growth will accelerate to 7.5 per cent during the fiscal 2018-19 from the 6.6 per cent expected in FY18 and stressed that the economy does not need a stimulus at this point because the reverses to growth were due to the note ban and there is limited fiscal space for such a move.