India plans to cut spending to curb deficit; may hurt growth
NEW DELHI: The government is likely to reduce spending for the current fiscal year by as much as Rs 2 lakh crore ($27.82 billion) as it faces one of the biggest tax shortfalls in recent years, three government sources said.
Asia's third largest economy, which is growing at its slowest pace in over six years because of lack of private investment, could be hurt further if the government cuts spending.
But with a revenue shortfall of about Rs 2.5 lakh crore, the government has little choice to keep its deficit within "acceptable limits", the first official, who did not want to be named, told Reuters.
The government has spent about 65% of the total expenditure target of Rs 27.86 lakh crore till November but reduced the pace of spending in October and November, according to government data. A 2 lakh crore-rupee reduction would be about a 7% cut in total spending planned for the year.
In October and November, government spending increased by Rs 1.6 lakh crore, nearly half the Rs 3.1 lakh crore it spent in September. The fiscal year starts April 1 and ends March 31.
Lack of demand and weak corporate earnings growth in the economy led to lagging tax collections this year. Analysts said growth will be hurt.
"When the private investment has slowed so much, this will definitely drag down growth further," said Rupa Rege Nitusure, chief economist at L&T Financial.
L&T Financial首席经济学家Rupa Rege Nitusure表示:“当私人投资大幅放缓时，肯定会进一步拖累经济增长。”
India's economic growth slowed for six consecutive quarters to 4.5% in July-September, despite a 135-basis-point cut in interest rates by the central bank since February 2019.
尽管印度央行自2019年2月以来降息135个基点，但印度经济增长连续6个季度放缓，7 - 9月低至4.5%。
Now, even the Reserve Bank of India seems to have become more worried about inflation rising. It kept its key lending rate on hold on December 5, even though it slashed its growth forecast for the current fiscal to 5%, which would be the lowest in a decade.
Even a surprise corporate tax rate cut announced by Finance Minister Nirmala Sitharaman earlier this year failed to spur private investment in the economy.
The government is likely to keep the fiscal deficit under 3.8% of gross domestic product, sources said, while letting it slip from its earlier set target of 3.3% for the year.
The government is likely to announce additional borrowing of Rs 3,000 crore to Rs 5,000 crore for the current year to match the revised fiscal deficit, two sources in the government said.
政府的两位消息人士称，政府可能会宣布本年度新增借贷300 - 500亿卢比，以弥补修正后的财政赤字。
译文来源：三泰虎 http://www.santaihu.com/49148.html 译者：Joyceliu
Late understanding of the fact. We the common men are very much affected. Running our family have become very tough.
Ram Prakash Shroff
Modiji will ensure the Indian Economy is destroyed beyond repair. Modiji will fly abrod.
Only a patriot like Modi can save naition.
You are right. Let's have Chidambaram back.
Ram Prakash Shroff
It is not important who should be next, the most important is to remove the present establishment.
the crux of the problem is a lack of demand due toreduced spending power in the hands of billions of people. reducing taxes for corporates alone will not help boost spending power.
Ram Prakash Shroff
The Country needs a Government who care for AAM ADAMI and not Adani and Ambani. The country needs a PM in the Country to attend to the problem of the Country.
In a democracy of 1.4 billion population where the "Freebie" has become an investment to capture the power,retain the power and then to recapture the power in the election,the leeway for curbing the deficit is only by the austerity measures. Germany could succeed by the austerity measures implemented by Ms.Angela Merkel, Chancellor of Germany. There are few lessons to learn from Mr.Xi Jinping of China and Ms.Merkel of Germany. PM,Modiji's austerity measures could succeed only by the cooperation of all political parties of India.
Thank God! Congress did not come to power, otherwise they would have spent all money in all kinds of waivers and free distribution to all so called poor people and made them useless and lazy.
Don't forget Monmohan Government faced the great recession brilliantly.