Finance Minister Nirmala Sitharaman arrives at the finance ministry before she leaves to present the federal budget in the parliament in New Delhi, India, February 1, 2021. (REUTERS)
Finance Minister Nirmala Sitharaman arrives at the finance ministry before she leaves to present the federal budget in the parliament in New Delhi, India, February 1, 2021. (REUTERS)

Fiscal policy won’t be tied to debt-GDP ratio for now

The 15th Finance Commission (FFC), which was chaired by N.K. Singh, has recommended bringing the public debt to GDP ratio down from 89.8% of GDP in FY21 to 85.7% of GDP in FY26.
By Asit Ranjan Mishra, New Delhi
PUBLISHED ON FEB 05, 2021 12:49 AM IST

The finance ministry may temporarily abandon targeting government debt to gross domestic product (GDP) ratio as the medium-term anchor for fiscal policy, limiting its focus on the glide path for fiscal deficit at least till FY26. The government holds that during the current economically volatile times, when there is no certainty about the growth trajectory, it may be difficult to project a public debt to GDP ratio.

The FY22 budget omits any talk about the government debt to GDP ratio even in the ‘Medium Term Fiscal Policy Cum Fiscal Policy Strategy Statement’, though the finance ministry through an amendment to the Fiscal Responsibility and Budget Management (FRBM) Act in FY19 had included it as the key fiscal target, promising to bring it down to 60% of GDP by FY25. Finance minister Nirmala Sitharaman in her budget speech gave a new fiscal consolidation path only to bring down fiscal deficit below 4.5% of GDP by FY26 from 6.8% budgeted for FY22.

“We hope to achieve the consolidation by first increasing the buoyancy of tax revenue through improved compliance, and second by increased receipts from monetization of assets, including public sector enterprises and land,” she said.

The 15th Finance Commission (FFC), which was chaired by N.K. Singh, has recommended bringing the public debt to GDP ratio down from 89.8% of GDP in FY21 to 85.7% of GDP in FY26.

The commission has recommended setting up of a high-powered inter-governmental group for crafting a new FRBM framework and oversee its implementation.

“What should be the new structure of fiscal targeting is a matter to be discussed separately. The government will be coming with a proposal. We will either set up a small committee to draft the FRBM or do it internally. I doubt the amendments will happen in the current budget session,” a senior finance ministry official said under condition of anonymity.

The official said it is not feasible to project debt to GDP ratio for the medium term in today’s uncertain times.

An email sent to a spokesperson of the finance ministry remained unanswered till press time.

SHARE THIS ARTICLE ON
Topics
Close
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US.(REUTERS)
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US.(REUTERS)

Oil slumps with wider markets, denting record start to 2021

Bloomberg
UPDATED ON FEB 26, 2021 06:52 PM IST
The demand outlook has improved, with traders and investment banks this week making a series of bullish calls and upward price revisions.
Close
There is also another plan at <span class='webrupee'>₹</span>1,499 that offers a JioPhone device, unlimited voice calls and data (2GB high-speed data every month) for one year(Reuters File Photo)
There is also another plan at 1,499 that offers a JioPhone device, unlimited voice calls and data (2GB high-speed data every month) for one year(Reuters File Photo)

Reliance Jio launches new unlimited plans to usher in '2G-mukt Bharat'

ANI, Mumbai
PUBLISHED ON FEB 26, 2021 06:47 PM IST
  • According to the plan, new users will get a JioPhone device, unlimited voice calls and data (2GB high-speed data every month) for two years at 1,999.
Close
The lockdown imposed to curb spreading of coronavirus infections had significantly impacted business activities and in turn contributed to sluggish revenue realisation. (Representative Image)(BLOOMBERG NEWS)
The lockdown imposed to curb spreading of coronavirus infections had significantly impacted business activities and in turn contributed to sluggish revenue realisation. (Representative Image)(BLOOMBERG NEWS)

Fiscal deficit rises to 12.34 lakh crore at end of January

PTI
PUBLISHED ON FEB 26, 2021 06:41 PM IST
The fiscal deficit at the end of January in the previous financial year was 128.5% of the Revised Estimates (RE).
Close
Trading in EU shares and derivatives, for example, has already left Britain for continental Europe. REUTERS/Simon Dawson/File Photo(REUTERS)
Trading in EU shares and derivatives, for example, has already left Britain for continental Europe. REUTERS/Simon Dawson/File Photo(REUTERS)

London could lose out to New York under draft EU finance deal

Reuters, London
PUBLISHED ON FEB 26, 2021 06:12 PM IST
  • Britain's financial services industry has been largely cut off from the EU, its biggest customer, since a Brexit transition period ended on Dec. 31 as the sector is not covered by the UK-EU trade deal.
Close
Union finance minister Nirmala Sitharaman. (File photo)
Union finance minister Nirmala Sitharaman. (File photo)

Support both public, private projects: FM to infra ministries

By Rajeev Jayaswal
PUBLISHED ON FEB 26, 2021 06:00 PM IST
The National Infrastructure Pipeline (NIP) will play a critical role in revitalising the economy that is recovering from the devastating impact of Covid-19 pandemic, said finance minister on Friday
Close
Indian economy grows by 0.4% in October-December 2020: Govt data(AP)
Indian economy grows by 0.4% in October-December 2020: Govt data(AP)

Indian economy grows by 0.4% in October-December 2020: Govt data

By hindustantimes.com, New Delhi
UPDATED ON FEB 26, 2021 06:20 PM IST
Indian economy grows by 0.4 pc in October-December 2020: Govt data
Close
Only 5% of the executives polled said they planned to hold bitcoin in 2021.(MINT_PRINT)
Only 5% of the executives polled said they planned to hold bitcoin in 2021.(MINT_PRINT)

Bitcoin slumps 6%, heads for worst week since March

Reuters, London
PUBLISHED ON FEB 26, 2021 04:14 PM IST
The world's biggest cryptocurrency slumped as low as $44,451 before recovering most of its losses.
Close
Sensex plunges nearly 2,000 points, Nifty down 568 points to end at 14,529(MINT_PRINT)
Sensex plunges nearly 2,000 points, Nifty down 568 points to end at 14,529(MINT_PRINT)

Sensex crashes over 1,900 points; Nifty tanks 568 points

Posted by Prashasti Singh | PTI
UPDATED ON FEB 26, 2021 06:17 PM IST
The 30-share BSE index ended with a loss of 1,939.32 points or 3.80 per cent at 49,099.99.
Close
Representational Image. (Getty Images/iStockphoto)
Representational Image. (Getty Images/iStockphoto)

Govt extends anti-dumping duty on Chinese tiles by three months

By Rajeev Jayaswal
UPDATED ON FEB 26, 2021 03:09 PM IST
In order to save the domestic tiles industry from cheaper imports from China, the government had imposed up to $1.87 per square meter anti-dumping duty during in 2016 for five years, which would have expired on March 28
Close
The current framework is appropriate for the next five years, according to a report from the RBI on Friday.
The current framework is appropriate for the next five years, according to a report from the RBI on Friday.

RBI favors retaining inflation target regime

Posted by Prashasti Singh | Bloomberg
PUBLISHED ON FEB 26, 2021 02:46 PM IST
The existing mandate requires the RBI to keep headline inflation at the 4% midpoint of its target range of 2%-6%.
Close
India adopted the flexible inflation targeting framework in 2016 and the government is due to review the same in the near future.(MINT_PRINT)
India adopted the flexible inflation targeting framework in 2016 and the government is due to review the same in the near future.(MINT_PRINT)

India's inflation target band appropriate for next 5 years: RBI report

Posted by Prashasti Singh | Reuters
PUBLISHED ON FEB 26, 2021 02:25 PM IST
"Trend inflation to which actual inflation converges after a shock provides an appropriate benchmark for the inflation target; trend inflation has fallen from above 9% before FIT to a range of 3.8%-4.3% during FIT," the RBI said in its release.
Close
A petrol pump attendant filling fuel into a vehicle in New Delhi.(Amal KS/ Hindustan Times)
A petrol pump attendant filling fuel into a vehicle in New Delhi.(Amal KS/ Hindustan Times)

'Fuel prices will come down after winters: Petroleum minister Dharmendra Pradhan

By hindustantimes.com | Written by Kanishka Sarkar, Hindustan Times, New Delhi
UPDATED ON FEB 26, 2021 02:56 PM IST
Dharmendra Pradhan said prices will come down a little as winter goes away. "It's an international matter, price is high due to increase in demand," he added.
Close
Investors feared foreign outflows as bond yields are inversely proportional to equity returns..(MINT_PRINT)
Investors feared foreign outflows as bond yields are inversely proportional to equity returns..(MINT_PRINT)

Sensex tanks 1,631 points to 49,407 in afternoon session; Nifty below 14,600

By hindustantimes.com | Written by Kanishka Sarkar
UPDATED ON FEB 26, 2021 01:15 PM IST
According to a Reuters poll, India's economy is likely to have returned to growth in the December quarter after contracting 7.5% in the July-September period.
Close
The company partnered with Alphabet Inc's Google in 2015 to bring free public WiFi to over 400 of the busiest railway stations in India by mid-2020.(HT Photo)
The company partnered with Alphabet Inc's Google in 2015 to bring free public WiFi to over 400 of the busiest railway stations in India by mid-2020.(HT Photo)

RailTel Corp of India jumps 16% in market debut

Reuters, Bengaluru
PUBLISHED ON FEB 26, 2021 11:10 AM IST
More than a dozen companies, including Burger King India, opted for initial public offerings (IPOs) in the last few months of 2020 to cash in on a rally in Indian shares, fuelled by record foreign inflows and an improving economic outlook.
Close
On Thursday, the rupee had settled at 72.43 against the American currency.(Mint)
On Thursday, the rupee had settled at 72.43 against the American currency.(Mint)

Rupee tanks 67 paise to 73.10 against US dollar in early trade

PTI, Mumbai
PUBLISHED ON FEB 26, 2021 10:56 AM IST
At the interbank forex market, the domestic unit opened at 72.43 against the US dollar, then lost further ground and touched 73.10, registering a plunge of 67 paise over its previous close.
Close
SHARE
Story Saved
OPEN APP