Tag: Economic Survey 2020

Economic Survey 2020: Pronab Sen says govt hiding fiscal deficit problem under the carpet

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government may need to relax its fiscal deficit target of 3.3 percent for FY20 in order to revive the economic growth, Krishnamurthy Subramanian, chief economic adviser, said in the Economic Survey 2020, as the nation faces its worst economic slowdown in a decade.

The economic survey has not provided any projection for the fiscal deficit. Economists believe that is around 3.8 percent.

Pronab Sen, former chief statistician, said expansion in the fiscal policy is unlikely without some breach of the fiscal deficit target.

“But I don’t think that’s the issue. The issue is that is it saying anything about what the true fiscal deficit is. All it is saying that it is going to breach,” he said.

“If it’s going to breach only because of the giveaways that have happened in the last 3 months or so then it means you are still continuing to hide the problem under the carpet,” Sen noted.

In 2019-20, the fiscal deficit was budgeted at Rs 7.04 lakh crore or 3.3 percent of GDP, as compared to Rs 6.49 lakh crore or 3.4 percent of GDP in 2018-19.

The survey believes uptick in growth of cumulative GST collections in October, November and December last year may contain fiscal deficit at the budgeted target.

Good and Services Tax (GST) collections, the biggest component of indirect taxes, grew by 4.1 percent during the April-November 2019 period.

The Economic Survey 2020 forecast India’s GDP growth to be in the range of 6 percent to 6.5 percent in the fiscal year 2020-21.

The Survey said that the uptick in second half of 2019-20 would be mainly due to 10 positive factors like picking up of NIFTY for the first time this year, an upbeat secondary market and higher FDI flows.

A build-up of demand pressure, positive outlook for rural consumption, a rebound of industrial activity, steady improvement in manufacturing, growth in merchandise exports, a higher build-up of foreign exchange reserves and positive growth rate of GST revenue collection may also support growth.

(With inputs from agencies)

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing Bell: Nifty ends below 12,000, Sensex 190 points lower post economic survey; IT, auto stocks drag

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian markets ended lower on Friday, dragged by metals, IT stocks, after the economic survey predicted FY20 GDP growth at 5 percent, slowest since the global financial crisis of 2008-09. Economic Survey 2020, tabled in the parliament today, projects economic growth at 6-6.5 percent in FY21, but warned it may have to miss its deficit target to revive growth.

The BSE Sensex ended 190 points lower at 40,723, while the Nifty50 index fell 74 points to settle at 11,962 dragged by metal, auto and IT stocks. Index heavyweights RIL, TCS, ICICI Bank, and HCL Tech contributed the most to the losses.

Growth fell to 4.5 percent in the July-September quarter. Consequently, the budget deficit may need to exceed this year’s target, 3.3 percent of gross domestic product, the government said in the economic survey. It also added that India would need to spend about $1.4 trillion in infrastructure in the next five years to expand the economy to $5 trillion from the current $2.8 trillion.

Meanwhile, broader markets were mixed for the day. While Nifty Midcap index shed 0.7 percent, Nifty Smallcap was flat.

Kotak Bank, SBI, IndusInd Bank, Bharti AIrtel, and Bajaj Auto were the top gainers on the Nifty index while, Tata Motors, ONGC, PowerGrid, UPL, and IOC led the losses.

Sectoral indices were mixed for the day. Nifty Metal fell the most, down 2 percent followed by Nifty IT, down 1 percent, Nifty Pharma and Nifty Auto also lost 1 percent each. Meanwhile, Nifty Bank and Nifty Realty were positive for the day, up 0.5 percent and 1 percent.

SBI rose over 2 percent after the lender reported a 41 percent rise in net profit in the third quarter of fiscal 2020 at Rs 5,583.36 crore as compared to Rs 3,954.81 crore in the same period last year. This is the biggest quarterly profit in at least 15 years of the bank, as asset quality improved and provisions for bad loans fell.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic Survey 2020 defends credibility of GDP data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Economic Survey 2020 by Chief Economic Adviser,  Krishnamurthy Subramanian has dedicated a chapter to argue that India’s GDP reading is not overstated. His predecessor, Arvind Subramanian recently claimed that GDP growth was overestimated by 2.5 percent between 2011-12 and 2016-17.

The PMEAC then rebutted this by questioning the methodology and data collection used by the former CEA but the former CEA defended his research paper by saying that he had used a framework to validate GDP from the demand side.

Now, the Eco Survey 2020‘s chapter 10, titled “Is India’s GDP Growth Overstated? No!” argues that “models that incorrectly over-estimate GDP growth by 2.7% for India post-2011 also misestimate GDP growth over the same period for 51 out of 95 countries in the sample”.

The survey goes on to argue that the standard difference-in-difference
(DID) model that has been criticised by Arvind Subramanian, fails to show any misestimation in the Indian GDP. It further states that Arvind Subramanian’s criticism doesn’t hold ground as the same model is applied in 51 other countries.

The survey forecasts India’s GDP growth to be in the range of 6 percent to 6.5 percent in the fiscal year 2020-21. The survey tabled in the Upper House on Friday believes the next fiscal is expected to pose challenges on the fiscal front and the FY20 fiscal deficit target of 3.3 percent of GDP may have to be relaxed.

The Indian economic growth is expected to pick up in the second half of FY20 and a strong rebound could be seen in FY21 on a low base, according to the document.

The annual economic growth slowed to 4.5 percent in the July-September quarter, the weakest pace since 2013, owing to weakening demand and private investment. Earlier this month, the ministry of statistics said in a statement that GDP is estimated to grow 5.0 percent in 2019-20, slower than the 6.8 percent growth of 2018-19.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic Survey 2020: These key people were involved in preparing the annual document

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Economic Survey 2020 was tabled in the Parliament on Friday, a day ahead of the presentation of the Union Budget 2020. The survey has forecast India’s GDP growth for the fiscal year 2020-21 in the range of 6 percent-6.5 percent and for FY20 at 5 percent.

The Indian economic growth is expected to pick up in the second half of FY20 and a strong rebound could be seen in FY21 on a low base, according to the document.

Easing of monetary policy by the Reserve Bank of India and several measures announced by the government in the last year present green shoots for growth in H2FY20 and FY21, noted the document.

“The government must use its strong mandate to deliver expeditiously on reforms, which will enable the economy to rebound in 2020-21,” added the document.

It also said that intervention by the government, though well-intended, often ends up undermining the ability of markets to create wealth and leads to outcomes that are the opposite of the intentions.

The survey was prepared by Chief Economic Advisor Krishnamurthy Subramanian with inputs from a number of experts that included FM Nirmala Sitharaman, Anurag Singh Thakur, Minister of State for Finance and Subhash Chandra Garg.

Here are the key people who helped in preparing the Economic Survey 2020:

Finance Minister Nirmala Sitharaman

Sitharaman is India’s first full-time female finance minister. Sitharaman is all set to present her second budget on Saturday amid growing economic challenges such as a massive fall in India’s GDP growth, high unemployment, declining savings and a slump in consumption. She has earlier served as the Minister of Defence and the Minister of Commerce and Industry.

Chief Economic Advisor Krishnamurthy Subramanian

The Economic Survey has been prepared by Chief Economic Advisor Krishnamurthy Subramanian with the help of other team members. Subramanian was appointed to the position on December 7, 2018.

Previously, Subramanian has been a part of expert committees for Securities and Exchange Board of India and the Reserve Bank of India and played a crucial role in major economic and corporate reforms in India.

Earlier, he was also associated with JPMorgan Chase, ICICI Bank and Tata Consultancy Services.

An alumnus of IIT-Kanpur, Subramanian holds a Master of Business Administration and PhD in financial economics from Booth School of Business, University of Chicago.

Minister of State for Finance Anurag Singh Thakur

Thakur was appointed as Minister of State for Finance in May 2019 after the Modi government came to power for the second time after a thumping victory. Thakur has been an MP from Hamirpur in Himachal Pradesh since 2008. Earlier, He also served as the president of the Board of Control for Cricket in India (BCCI).

Subhash Chandra Garg

A 1983 batch IAS officer, Subhash Chandra Garg, is former Finance Secretary and Economic Affairs Secretary of India. Garg earlier served as an Executive Director in the World Bank. Garg held various key positions for the central government and Rajasthan government. After being transferred to power ministry last year, Garg resigned.

Garg holds graduate degrees in Law and Commerce from Rajasthan University.

Revenue secretary Ajay Bhushan Pandey

As revenue secretary, Ajay Bhushan Pandey is currently responsible for raising resources at a time when revenue collection is seen slipping amid a massive economic slowdown in the country. Pandey is likely to influence the decision taken in Union Budget 2020 with regards to the Direct Tax Code, if any. Pandey is a 1984 batch IAS officer from Maharashtra cadre. Pandey too is an IIT-Kanpur graduate.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic Survey 2020 points out high drop-out rates in schools

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Economic Survey, released on Friday, pointed out high drop out rates at various levels of schooling and lack of affordability in higher education as areas of concern. The survey emphasised that Samagra Shiksha 2018-19, was launched to envisage school education as a continuation from pre-school to senior secondary level to provide access to education to all.

Accordingly, the government has initiated the process of formulating a new Education Policy with a focus on quality education, innovation and research.

According to the pre-budget survey tabled in Parliament by finance minister Nirmala Sitharaman, the Government’s interventions in the education sector are targeting the Sustainable Development Goal (SDG)-4 of inclusive and equitable quality education for all by 2030.

Expansion of Navodaya Vidyalaya Scheme, Pradhan Mantri Innovative Learning Program, Digital Infrastructure for Knowledge Sharing (DIKSHA) platform and e-content sites like e-pathshala, are some of the other government initiatives in this direction.

The survey also outlines initiatives taken for improving quality learning and teaching in higher and technical education. Establishment of Higher Education Financing Agency (HEFA), schemes like National Educational Alliance for Technology (NEAT), Education Quality Upgradation and Inclusion Programme (EQUIP), PARAMARSH and mega online degree programme SWAYAM 2.0 are among others.

The Economic Survey is a crucial document scripted by the Chief Economic Advisor and approved by the union finance minister. The survey gives a sneak peek into the Union Budget that will be presented in Parliament on Saturday.

The survey provides a bird’s eye view on the performance of various sectors in the financial year and indicates possible policy changes in the year ahead.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic Survey 2020: Govt needs to invest $1.4 lakh crore in infra to hit $5 trillion economy goal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India needs to spend $1.4 trillion on infrastructure to remove the constraints in growth, as power shortages, inadequate transport and poor connectivity affects overall growth performance, and to achieve a GDP of $5 trillion by 2024-25, Economic Survey 2019-20 said on Friday. Finance minister Nirmala Sitharaman tabled the Economic Survey 2019-20 in Parliament on Friday.

The Economic Survey gave a detailed analysis of the trends in India’s infrastructure sector. The survey emphasized that investment in infrastructure is necessary for growth.

Power shortages, inadequate transport and poor connectivity affect overall growth performance. Since the provision of adequate infrastructure is essential for inclusive growth, India recently launched the National Infrastructure Pipeline (NIP) for the period FY 2020-2025.

To achieve GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs 100 lakh crore) over these years on infrastructure so that lack of infrastructure does not become a constraint to the growth of Indian economy.

NIP is expected to enable well-prepared infrastructure projects that will create jobs, improve ease of living and provide equitable access for infrastructure for all thereby making growth more inclusive, the Survey observes.

As per the NIP, Central Government (39 per cent) and State Government (39 per cent) are expected to have an equal share of funding of the projects followed by the private sector (22 per cent).

Projects worth Rs 42.7 lakh crore (42 per cent) are under implementation. Financing of the National Infrastructure Pipeline will be a challenge but the Survey hoped that a bouquet of well-prepared project will attract from Central and State Government, urban local government, banks and financial institutions, PE funds and private investors, both local and foreign.

The Economic Survey gave an overview of sectoral developments relating to Railways, Road Transport, Civil Aviation, Shipping, Telecom, Petroleum and Natural Gas, Power, Mining, Housing and Urban Infrastructure. The Economic Survey noted that road transport is the dominant mode of transportation in terms of its contribution to Gross Value Added (GVA).

In 2017-2018 the share of the transport sector in the GVA was about 4.77 per cent of which the share of road transport is 3.06 per cent followed by Railways (0.75 per cent), air transport (0.15 per cent) and water transport (0.06 per cent). Total investment in the roads and highways sector has gone up more than 3 times in five year period of 2014-15 to 2018-19.

The Survey marked that during the year 2018-19 Indian Railways carried 120 crore tones of freight and 840 crore passenger making it the world’s largest passenger carrier and fourth-largest freight carrier.

Taking a comprehensive view of Civil Aviation the Survey observed that India has 136 commercially managed airports by Airport Authority of India and 6 under Public-Private Partnerships for operation, maintenance and development of airports.

A total of 43 airports have been operationalised since the scheme for operationalizing unserved airports (UDAN) was taken up. India stood first along with 7 other countries in airport connectivity according to the Global Competitiveness Report 2019 of the World Economic Forum. To ease the strain on existing airport capacities 100 more airports are to be made operational by FY 2023-24.

The Survey noted that to continue with the high growth trajectory the Government has been providing a congenial environment so that Indian carrier double their fleet from about 680 aircraft at the close of 2019 to 1,200 by FY 2023-24. In the telecom sector, the Economic Survey noted that there are four major players in the telecom sector in India today — three in the private sector and BSNL and MTNL in the public sector.

The survey highlighted that since the price of data in India is among the lowest in the world it will help to achieve the goal of developing broad-band highways as part of the digital India campaign.

The Economic Survey observed that India is the 3rd largest energy consumer in the world after the US and China. India’s energy requirement is fulfilled primarily by coal, crude oil, renewable energy and natural gas.

The Survey said that India has a refining capacity of 249.4 MMTPA and is the fourth largest in the world after the US, China and Russia. There is a need to augment refining capacity to meet the growing demand for petroleum fuels and petrochemicals.

The Survey underlined that access to electricity is necessary for making growth inclusive and for promoting ease of living. A Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA) was launched on September 25, 2017, with an outlay of Rs.16,320 crores to achieve universal household electrification by providing last-mile connectivity by 31-03-2019.A

While giving an overview of the construction sector the Survey said that it accounts for 8.24 per cent of GDP which includes housing and employs about 12 per cent of the workforce.

The Pradhan Mantri Awaas Yojana -Urban (PMAY-U) was launched in June 2015. The Survey said that it is one of the largest housing schemes of the world covering entire urban India and is being implemented through four verticals. The scheme is moving towards achieving the vision of pucca house to every household by 2020. Thirty-two lakh houses have been completed and delivered.

The Economic Survey stated that India produces 95 minerals which include four hydrocarbon energy minerals, five atomic minerals, ten metallic, 21 non-metallic and 55 minor minerals. Mining and quarrying sector contributes about 2.38 per cent to GVA during 2018-19.

On a positive note, the survey stated that there has been a notable turn around in mineral production because of policy reforms and production of major minerals during the year 2018-19 has recorded a growth of 25 per cent when compared to last year in terms of value.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic Survey 2020: Here’s what economists, statistician make of it

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government tabled Economic Survey 2020 in Parliament. Indranil Pan, chief economist at IDFC First Bank, Pronab Sen, former chief statistician and Ananth Narayan, professor at SPJIMR shared their views and readings on the survey.

On the fiscal deficit front Sen said, “The point is as far as FY20 is concerned, there will be a breach. The real question is what it is saying about 2021 – that’s more interesting because what you have is 2 statements – one is not mentioning anything about the fiscal deficit but talking about the expansionary fiscal policy. I don’t see how you are going to have an expansion in fiscal policy without some breach of the glide path if not this year’s breach target.”

“All it is saying is that it is going to breach and if it’s going to breach only because of the giveaways that have happened in the last 3 months or so, then it means you are still continuing to hide the problem under the carpet,” said Sen.

When asked about Essential Commodities Act, Sen said, “We have been talking about scrapping the Essential Commodities Act (ECA) for many years now and the subsequent governments have talked about it and have not been able to do anything about it. I see no reason why the same set of issues would not crop up now. The real question is do you want to do away with the ECA or do you want to dilute it in some manner. I think doing away with it is a bad idea because it does have an important role to play, but diluting it and bringing in some discipline is not such a bad thing.”

On 6-6.5% GDP forecast for next year as well as on the hope that growth will pick up in the second half of FY21, Indranil Pan of IDFC First Bank said, “On the growth front we are expecting that there could be a better growth performance for the economy in the second half relative to the first half and that – we were anyway sort of building in our 5 percent model for gross domestic product (GDP) for the current fiscal year. For the next fiscal year, a lot would depend on not only the domestic conditions but even the global conditions, where we see the coronavirus issue affecting the financial markets and therefore we need to look at that perspective also.”

SPJIMR’s, Ananth Narayan said, “There is no doubt that we need to get the credit chugging in the system again and for a variety of reasons banks and financial services ecosystem is no shape right now to fund India’s growth. I think a big part of that is actually  two-fold. First is there is this overhang of non-performing assets, a lot of it is in real sector particularly for NBFCs but it is not limited to real estate alone. It is whole series of sectors. Something has to be done to quarantine these non-performing assets, and the full recognition is not done as yet.”

“The National Company Law Tribunal (NCLT) and Insolvency and Bankruptcy Code (IBC) is working well but it is in no position to handle this huge stock of non-performing assets (NPA) that we have. It is important therefore that something be done as a onetime exercise to remove the burden of non-performing assets from the financial services ecosystem.”

“It sounds like a bad idea to have a troubled asset relief program (TARP) or a bad bank because it sounds like throwing good money after bad which is why it is essential that alongside that there has to be accountability and more importantly reform,” added Narayan.

When asked about ‘Assemble In India’ concept, Narayan said, “I am all for investments. I thought the last year’s Economic Survey which focused a lot on investments, struck the right tone. I know the debate today is about consumption, but funnily India tends to consume when there are investments going through.”

“Unfortunately, there are only two avenues for investment, one is of course the government. Given the lack of fiscal space and the lack of track record on successful government investments beyond roads for instance, that is not a very promising area. Second area of course has to be on foreign direct investments (FDI) and anything to push up FDI is great. ‘Assemble in India’ as a phrase sounds great because if you are moving supply chains of telecom, etc. from China and Taiwan into India, you will start with assembly because the entire supply chain down to chips, etc. will take a long time develop in India. So, starting as assembly, it strikes the right note. However, a phrase, a catchphrase and a slogan is not just enough, there are plenty of things that go along with it – land laws, labour laws, actual ease of doing business on the ground and not the World Bank number, contract enforcement, predictability of policy, and of course the point about you need to open up imports; if you want re-export, you have to open up your imports in a big way and not put tariffs and trade barriers around that,” said Narayan, adding that  it is a whole ecosystem which has to be addressed. It does sound like boiling the ocean and a lot of people will say that this cannot be done, but I think India frankly has no other option but to go down this path, otherwise we are looking at a demographic dividend which is just not being reaped at this point of time,” he further added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic survey 2020 presses for privatisation, says performance of PSUs improved after govt exit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In the Economic Survey 2020 tabled on Friday,  government said privatisation unlocks the potential of central Public Sector Enterprises (CPSEs) to create wealth. The aim of any privatization or disinvestment programme should be the maximisation of the government’s equity stake value, the Survey said, adding that privatised government firms performed better than their peers in their respective sectors.

The survey analysed the before and after performance of 11 CPSEs that had undergone strategic disinvestment from 1999-2000 to 2003-04.

The approval of strategic disinvestment in Bharat Petroleum Corporation Limited (BPCL) led to an increase in value of shareholders’ equity of BPCL by Rs 33,000 crore when compared to its peer Hindustan Petroleum Corporation Limited (HPCL).

This reflects an increase in the overall value from anticipated gains from consequent improvements in the efficiency of BPCL when compared to HPCL which will continue to be under government control, the Survey said.

The privatised CPSEs, on an average, perform better post privatisation than their peers in terms of their net worth, net profit, return on assets (ROA), return on equity (RoE), gross revenue, net profit margin, sales growth and gross profit per employee, the survey added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Economic Survey: 10% would be a realistic number for the nominal GDP growth, says Arvind Virmani

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Economic Survey 2020 forecast India’s GDP growth to be in the range of 6 percent to 6.5 percent in the fiscal year 2020-21. The survey tabled in the Upper House on Friday believes the next fiscal is expected to pose challenges on the fiscal front.

When asked if this was a ambitious or a realistic forecast, Arvind Virmani, chairman, foundation for Economic Growth and Welfare (EGROW) told CNBC-TV18, “You can expect their real target is 6 percent. The government always tries to put in a little bit of ambition. So, I think you should focus on 6 percent. It is a reasonable target to hope for but the difficulty I have is that quarterly data is not made from the ground up. It is an interpolation or an extrapolation. So,  till we have the annual number, I don’t know frankly what the gross domestic product (GDP) growth is for the full year, which is yet to end,” he said.

“Let us say it is 5 percent for this year when the final number comes in. 6 percent is quite possible but it will depend critically on what happens in the budget. I have been saying this for the last six months that in next year what the government does in terms of reforms etc is going to critically influence the numbers for next year. So, all my forecasts are conditional on their actions,” he added.

CNBC-TV18’s poll indicated a number of 10 percent for FY21 as a realistic number for nominal GDP. Virmani said, “The inflation, consumer price index (CPI) number would be between 4.5 and 5 than the historical – you subtract roughly one percent from that, 3.5-4 would be the GDP deflator roughly and if you add that to 6 percent that gives you 9.5-10 percent. So 10 percent would be a realistic number for the nominal GDP growth.”

The survey is making it clear that in FY21 the revenue shortfall is expected to pose a challenge as far as the fisc is concerned. It also says that the government may need to relax the fiscal gap for FY20 and that countercyclical measures are required to boost growth. Virmani said, “Them stating countercyclical is consistent with getting some real substantive reforms because as I have been stating for a long time that tax reforms lower revenues for a year or so, but raises the trajectory of revenue growth over the next few years in terms of higher buoyancy etc. So it is something that we not only need but the government should do.”

In that sense the hint of countercyclical policy is consistent with this expectation, he added.

“As far as the specific numbers on fiscal deficit is concerned, the issue is what  the government can get away with in terms of FRBM constraints. So, the number that has been kind of playing around for the last year of upto 0.5 percent of GDP would be acceptable even if one were a stickler for the FRBM, and I would say a similar sort of order of magnitude for countercyclical policy – above the earlier trajectory,” Virmani further added.

Furthermore, strategic disinvestment, privatisation and non-tax revenue mop-up were likely to be the big themes for budget 2020. However, the Economic Survey 2020 seems to have adding a word of caution saying that high non-tax revenue cannot be sustainable year after year – there is only so much that you can privatise or strategically divest or monetise. When asked what he made of that, Virmani replied, “One, on privatisation because some of the big ticket stuff has not actually happened so far. The Air India has been announced, there has been talk of BPCL but none of that has actually happened. So it may be cautioning that some of these ambitious targets, which were set last year may not actually be completed by March.”

“Second, the Reserve Bank of India (RBI) gave some extra dividend in the last year, certain other things like spectrum etc are one-time things. I recall that in 2010 the same thing happened and we were cautioning that it should actually be used to reduce the deficit and not be taken as something, which will happen many times in the future and step-up your expenditure. So both those cautions are well-taken in my view,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow