Contact Your Financial Adviser Money Making MC
16
January 2019
 |
Prime Minister's party (The
Total Investment & Insurance Solutions)
Prime Minister Narendra
Modi's party is in favour of an expansionary economic policy and does not
consider the government's plan to keep the fiscal deficit to 3.3 percent of GDP
as "sacrosanct", a party spokesman told Reuters.
Ahead of a general election that must be held by May and after a string of losses in recent state polls, the government run by the Bharatiya Janata Party (BJP) has announced several stimulus measures for the countryside where millions of farmers are grappling with low crop prices. Other fiscal moves have been aimed at helping small businesses.
Ahead of a general election that must be held by May and after a string of losses in recent state polls, the government run by the Bharatiya Janata Party (BJP) has announced several stimulus measures for the countryside where millions of farmers are grappling with low crop prices. Other fiscal moves have been aimed at helping small businesses.
The measures are likely to be a drain on
finances in Asia’s third-biggest economy, though the Modi administration is
expected to get the Reserve Bank of India to agree to transfer an interim
dividend of 300-400 billion rupees ($4.32 billion-$5.8 billion) to the
government by March, Reuters reported last week quoting sources.
Weak consumer spending and the fragile farm
sector have already been a drag on economic growth, creating a headache for
Modi as he struggles to meet ambitious job creation targets.
India lost 11 million jobs last year, with
around 83 percent in rural areas, according to independent think-tank the
Centre for Monitoring Indian Economy, as operational costs surged for small
businesses. Those costs were boosted by the launch of a national sales tax in
2017 and the economic impact of an earlier ban on high value currency notes.
“There’s a demand, there’s a debate - all my
colleagues are saying what’s the need of keeping the fiscal deficit in check
when there is a distress in a particular sector,” said Gopal Krishna Agarwal,
the economic affairs spokesman for the Hindu nationalist BJP, referring to the
farm sector.
“Even think-tanks associated with us are
talking in this sense. Very few people domestically are talking about fiscal
prudence. Only foreign think-tanks are talking fiscal prudence, fiscal
prudence. I strongly believe an expansionary policy can benefit the party,” he
said in an interview on Tuesday night.
India’s 10-year benchmark bond yield rose 4
basis points to 7.53 percent after the news, its highest since January 8 on
worries about the fiscal deficit. The rupee also weakened to 71.23 to the
dollar from its previous close of 71.03.
Agarwal, a chartered accountant who is a
director at state-run Bank of Baroda and a member of a government committee on
small and medium-sized businesses, said Modi was aware of his party colleagues’
thinking but that no final decision had been taken.
D.S. Malik, a spokesman for the Ministry of
Finance, did not respond to calls and emails seeking comment. Finance Minister
Arun Jaitley, who is in the United States for a medical check-up, said in a
Facebook post on Tuesday that India’s “fiscal discipline during the past five
years has been amongst the best as compared to any preceding period”. The Total Investment & Insurance
Solutions
No comments:
Post a Comment