Farm debt relief, pay hike to widen fiscal deficit
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New Delhi, April 2nd India’s fiscal deficit is a significant increase in the Sixth Committee recommends pay about 40% more in the entire Pay-employed by the central government and the government decided to set aside Rs 60,000 crore as a farmer debt relief. Expenditure for individual budget items, such as oil and losses on borrowings of public electricity companies are excluded. Moreover, if the deficit in the country, governments, the impact would be greater. According to a report by the ADB, isolate domestic prices of the rise in international prices also need additional funding in the budget this year. These factors are not only obstacle to fiscal consolidation, but also a public debt, which represents about 80% of GDP, among the highest in the world. ADB pointed out the debt service bruises financial flexibility, which is essential for public investment in infrastructure. Expenditure on interest are the projected increase of 11% in 2007-08 and just over 30% of the total turnover of income. In particular, it is the lat full budget before the Lok Sabha investigations be held in 2009. There was a populist attitude for expenditures on health, education and rural infrastructure, which is also in conformity with the plan of the 11 th integrated strategy for growth. Although the consolidation of public finances, the strategy so far by a growth of turnover led to the quality of expenditure can be questioned, the report added. |