RBI flags concern over rising subsidies by states, says will hinder developmental and capital spending
Mumbai/IBNS: The Reserve Bank of India (RBI) expressed concern over the increase in subsidies announced by the states underscoring the adverse impact on their financial health.
The central bank noted that the rising expenditure on non-merit subsidies may raise the share of committed expenditure in states' spending.
“This is likely to constrain the fiscal space available to states for developmental and capital spending,” the RBI said in its Financial Stability Report, December 2022
States' expenditure on subsidies has grown by 12.9% and 11.2% in FY21 and FY22 respectively after contracting in FY20. Commensurately, the share of subsidies in their total revenue expenditure has also risen from 7.8 percent in 2019-20 to 8.2 percent in 2021-22, RBI said.
"Notwithstanding the gains from fiscal consolidation, there are concerns about rising subsidies announced by many states. The 15th Finance Commission’s report has also flagged the issue of the rising share of subsidies in some of the states’ revenue expenditures," the RBI said.
IBNS
Senior Staff Reporter at Northeast Herald, covering news from Tripura and Northeast India.
Related Articles
CRR cut, AI ethics push, and SORR benchmark: Experts hail RBI’s pragmatic policy moves
Mumbai: The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5% while the cash reserve ratio (CRR) has been slashed by 50 basis points to 4 percent, media reports said.
JP Morgan gives 'overweight' rating to Adani Group bonds
Mumbai: US investment bank JP Morgan has assigned an 'overweight' rating to four bonds issued by the Adani Group, citing the group's capacity to scale and grow through internal cash flows, which reduces the likelihood of credit stress.
LG Electronics files DRPH with SEBI; IPO size expected to be over RS 15,000 cr
Mumbai: South Korean electronics giant LG Electronics has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Friday for the proposed public listing of its Indian business, according to a notification on the Bombay Stock Exchange (BSE).
De-dollarisation not on India's agenda; derisking domestic trade is: RBI Governor Shaktikanta Das
Mumbai: India has not initiated any steps towards de-dollarisation and is solely focused on mitigating risks to domestic trade from geopolitical uncertainties, Reserve Bank of India (RBI) Governor Shaktikanta Das clarified on Friday, media reports said.
Latest News
Fish trader arrested under POCSO Act for raping a minor in Agartala
Chief Minister kicked off grand ‘Mayer Goman’ festival amidst huge crowd
Two Indian men jailed, caned for robbing and assaulting sex workers in Singapore hotels
Pakistan offers Trump $1.2 billion Pasni port project near India’s Chabahar in bid to reset US ties
