The document discusses the state of India's public finances, including rising government debt levels and non-performing assets in public sector banks. Some key points:
- Government revenue deficits have averaged 40% of gross revenues each year from 2007-2015, despite expenditure growing faster than revenues. High inflation eroded the value of revenues.
- Interest payments, personnel costs, and establishment expenses account for 80-85% of government budgets, leaving only 15-20% for development. Rising debt levels could reach unsustainable levels in the next 5-10 years if trends continue.
- Non-performing assets in public sector banks have risen three-fold in recent years, with an estimated Rs. 20 lakh
Discusses financial mismanagement in states of North Eastern India and how the Govt. of India could direct its funds to achieving peace in the tinder box of NE India.
Discusses financial mismanagement in states of North Eastern India and how the Govt. of India could direct its funds to achieving peace in the tinder box of NE India.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
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Cover Story China Running out of Breath
Outlook Crude Oil
Stats India Trade Deficit FY-2014
Emerging Country Russia
In Focus Land Acquisition Bill- A Snapshot
CII’s flagship monthly publication Economy Watch has been now revamped and rechristened as ‘Economy Matters’. Apart from encompassing all the key features of the old version, the new issue also carries a new section on Corporate Profitability to keep readers abreast about the latest trends in corporate performance. The ‘Economy Matters’ brought out by CII Research seeks to provide an in-depth update on current trends in the domestic and international economy and helps in tracking policy developments and understanding industry dynamics.
Unconstitutional Siphoning of Government Funds in IndiaShantanu Basu
Updated version of a presentation that was scheduled to have been made on Feb 27, 2015 but was deliberately sabotaged by India's CAG in tandem with the Congress Govt. of Assam so that critical oversight failures would never come to light. Documents the methodical siphoning of govt. funds to unknown individuals and groups in a sensitive border state in NE India. There are innumerable questions about the facilitative roles, both as acts of commission and omission, played by government and statutory oversight agencies that await answers.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
Cover Story China Running out of Breath
Outlook Crude Oil
Stats India Trade Deficit FY-2014
Emerging Country Russia
In Focus Land Acquisition Bill- A Snapshot
CII’s flagship monthly publication Economy Watch has been now revamped and rechristened as ‘Economy Matters’. Apart from encompassing all the key features of the old version, the new issue also carries a new section on Corporate Profitability to keep readers abreast about the latest trends in corporate performance. The ‘Economy Matters’ brought out by CII Research seeks to provide an in-depth update on current trends in the domestic and international economy and helps in tracking policy developments and understanding industry dynamics.
Unconstitutional Siphoning of Government Funds in IndiaShantanu Basu
Updated version of a presentation that was scheduled to have been made on Feb 27, 2015 but was deliberately sabotaged by India's CAG in tandem with the Congress Govt. of Assam so that critical oversight failures would never come to light. Documents the methodical siphoning of govt. funds to unknown individuals and groups in a sensitive border state in NE India. There are innumerable questions about the facilitative roles, both as acts of commission and omission, played by government and statutory oversight agencies that await answers.
Організація інклюзивного навчання дітей з особливими освітніми потребами в КЗ « Спеціалізована школа – загальноосвітній навчальний заклад №1 І-ІІІ ступенів м. Приморська з поглибленим вивченням окремих предметів та курсів»
Приморської міської ради Запорізької області
SECURITY IMPLEMENTATION IN MEDIA STREAMING APPLICATIONS USING OPEN NETWORK AD...Journal For Research
Media has been a very important medium for entertainment and communications and the captured media was transmitted in analog form. Media providers do not want their end users to store and duplicate the streamed media because the end user can freely distribute the streamed media without any control from the source. Hence while dealing with media streaming, replay protection and integrity protection are the most important factors. The main aim of this paper is to implement the concept of WebRTC to stream the media between the participating end points which is a powerful tool used to incorporate RTC capabilities into browsers and mobile applications. The aim is to develop a secure media stream from an end point that flows through the Open Network Adapter to the Avaya Media Server (AMS) and is hosted by an application on the Engagement Development Platform. The Open Network Adapter with Avaya Fabric Attach is capable of securing the required flow.
Leila Bologna è una delle idee progettuali che hanno partecipato a CoopUP Bologna 2016, percorso di incubazione, formazione e networking promosso da Confcooperative Bologna, Kilowatt, Irecoop e Emil Banca. E' il primo esperimento di incubazione di ecosistema, pensato non per accelerare la singola idea, ma per avviare il nucleo di un ecosistema produttivo, creativo, sociale.
The power electronics device which converts DC power to AC power at required output voltage and frequency level is known as inverter. Multilevel inverter is to synthesize a near sinusoidal voltage from several levels of dc voltages. In order to maintain the different voltage levels at appropriate intervals, the conduction time intervals of MOSFETS have been maintained by controlling the pulse width of gating pulses. In this paper single phase to three phase power conversion using PWM technique. The simulation is carried out in MATLAB/Simulink environment which demonstrate the feasibility of proposed scheme.
India Budget 2012-13 - Analysis by Prabhu SrinivasanPrabhu Srinivasan
Budget 2012-13 has invited more criticisms than appreciations from the various stakeholders of the country. Given the unanticipated difficult situation the global markets are currently in, and the multiple problems that the Indian economy is facing, such as weakening of Rupee against US Dollars, High cost of funds, Inflationary pressures, and High unemployment levels to name a few, the finance ministry has opted for a stringent budget to defy these problems and bring the economy back on a sustainable growth path. I would like to conclude the analysis with my view that the key lies in implementation of the plans. Having observed in the past, that implementation of various initiatives have seen multiple road-blocks stalling them abruptly, we shall try to learn from our past to ensure growth and prosperity of the world’s largest democracy!
A study on Budget deficit AND Its impact on the economy of BangladeshMd Showeb
Government budget deficit is the difference between government revenues and expenditures. Government has different sources of revenues. Major portion of government revenues comes from direct and indirect taxes. Direct taxes come from income and profits of individuals and institutions and indirect taxes come from import duty, supplementary duty and value added tax. It can be put in different way. Direct taxes are the part of economic revenues and incomes of individuals and institutions and indirect taxes are the part of economic transactions in the form of buy, sale, export and import transactions. If government wants accelerate its revenues to meet the growing public expenditures and to reduce the budget deficit without reducing the expenditures of different influential sectors, much efforts should be made to increase economic revenues and income as well as the economic transactions so that the government revenues can meet the growing demand of the economy with the increase in revenues from income tax, import duty, supplementary duty and value added tax. In this regard the concentration of the report is on the management of deficit budget to minimize bad effects and maximize the utilization of funds. Having budget deficit is not a problem at all. The problems lie with the government inefficiency in the management of budget deficit. The evaluation of different reasons behind deficit budget and the evaluation of different bad effects of deficit budget are two crucial parts of our discussion. The impact of budget deficit on the different sectors of the economy is addressed here with relevant information. It is further concentration point of the report to find ways to improve the management performance of the government to achieve different macroeconomic goals with the help of expansion of economic revenues and transactions. The government revenues increase with the increase in economic revenues and economic transactions. The key point of our discussion is government should not decrease the public expenditures as the population is growing. The expenditures on different public sectors have to be increased as the population is growing. But budget deficit should not grow to meet the expenditures as budget deficit has some associated problems with it. For this reason government has to concentrate on accelerating the revenue collection rapidly with the expansion of economic revenues and economic transactions. For this reason government should try to integrate different policies to achieve key macroeconomic goals.
http://bit.ly/GEWaout2014
Les dirigeants sont de plus en plus conscients du potentiel inexploité de l'Afrique sub-saharienne. La population de l'Afrique subsaharienne est devrait croître plus rapidement que dans toutes les autres régions du monde. En conséquence, en 2040, le Continent africain devrait avoir la plus grande force de travail du monde et pourrait avoir une croissance économique plus rapide que n'importe quelle autre région.
After the US dollar replaced gold, the US debt became the attention worldwide, thus the demand for the US dollar continued, furthermore the extremely low interest of the dollar. This helped the US government to borrow great amounts of debt as well as kept the creditors pleased. Due to the pandemic, the US economy retrograded because of the tax cut and unproductive rescue spending plan plus surpassing spending of the government. The rising inflation starts to increase to high levels, which certainly the government must cut back spending or its patterns, while this will lead to uncertain consequences for the long future. This paper discusses several different perspectives on the US government's sustainability as its ability to settle the debt in future, the fate of growth burdened with that debt through the neoclassical mode of growth, and also the effect of anxiety of defaults and unfunded obligations. Inversely, it explores the strength of the dollar with a low-interest rate and its sustainability worldwide. We also propose ways helping of strengthen the fiscal government position and solutions to help the economy recover in long term and to easiest the situation. In the synopsis, we propose something that could affect and shake the global market.
Dance of democracy or descent into mockocracyShantanu Basu
Briefly discusses the role of small parties that do not participate in elections in India but are errand boys of the larger ones in criminality like cash and drugs distribution during elections in India.
Briefly registers my protest against the proposed implementation of NYAYA by the Indian National Congress. It opposes the very idea of unsustainable cash handouts to the indigent.
Telecom Revolution, Governnace and Elections in IndiaShantanu Basu
Briefly discusses the telecom and media revolutions in India. The article concludes that a large part of voting in India's next General Election in 2019 would be decided from homes and that such choices would make voters much more conscious of seeking accountability of their elected representatives.
Briefly discusses the proposal to laterally induct officers from outside government of India as Joint Secretary. The article analyses the debate and concludes that such lateral recruitments ignore the reality of a crying need for reform of India's colonial civil service
India General Election 2019 via Internet and wireless devicesShantanu Basu
Briefly analyses the spread of telecom and visual media in India since the last general election in 2019. This article analyses thespread and then relates it to the general election 2019 in India. It concludes that this election could well be fought from home and on hands than in public rallies. This revolution would also probably usher in a whole new paradigm of real time accountability in governance and cause politicians to be responsive to their electors.
Briefly discusses the Nirav Modi episode and compares it with mage malfeasance in governments in India. The article concludes that corruption in India centres on a cash-driven electoral syatem
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
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how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
1. 1
State of Our Nation’s Finances
Shantanu Basu
The rapidly growing indebtedness of governments and mounting non-performing assets of
banks, mostly in the public sector, both of which strike at the heart of financial administration
of this country, and include our legitimate personal finances as well, are of the highest
concern. In seven successive fiscals till 2014-15, governments, state and central,
cumulatively expended Rs. 1.72 lakh crore while earning revenues of Rs. 1.23 lakh crore,
leaving a revenue deficit of Rs. 0.49 lakh crore, i.e. 40% of gross revenues on an average
each year. While expenditure grew, only in absolute terms, by a factor of 2.33, revenues
increased by a factor of 2.54. Yet the revenue deficit multiplied by a factor of 1.87. Why did
this paradox arise?
The inflation rate in India averaged 7.38% in 2012-16, reaching an all-time high of 12.17% in
Nov. 2013 and a record low of 3.27% in Nov. 2014. This had an invariable effect on
government spending. Although revenues rose by an average of about 25% each in seven
fiscals in absolute terms, yet relatively high inflation and rampant waste and leakages
massively reduced the value of every Rupee governments earned and spent. Social and
community services accounted for about Rs. 2.88 lakh crore or approx. Rs. 2400 per head of
India’s 1.20 billion populations in 2007-08. Reduced to 1990-91 prices, the real annual
expenditure declines to about Rs. 1.34 lakh crore or Rs.1160 per head or Rs. 3 per day. If this
were further conservatively reduced by 35% for leakage & wastage and 8% to a conservative
inflation rate, the per capita development expenditure outlay collapses to barely Rs. 661 per
annum or a ludicrous Rs. 2 per day. Today when lentils retail for over Rs. 100 or sugar at Rs.
50 a kilogram, the cost of government is almost the same as that of governance
(development). It is therefore not as if there was any dramatic rise in government revenues
and spending over the last several decades, notwithstanding substantial media publicity.
Today, the Indian Rupee is worth less than a third of what it was in 1947 at a simple
compounded average of 3% per annum.
Historically Governments have tried to make their ends meet via generation of internal
revenue and resorted to deficit financing by market loans, small savings, provident funds,
special treasury bills, overseas multilateral and bilateral borrowings, etc. All these
instruments carry rates of interest that vary from 5-11% per annum that must be mandatorily
discharged. Non-tax revenues such as dividends and share of profits of state-owned utilities
and companies have not risen commensurate with the giant cumulative state investment in
them. Forty seven CPSUs accounted for about 13.50% of total market capitalization as on
Jan. 31, 2017. Not surprisingly, the capital-intensive monopolistic ONGC’s BSE share price
at Rs. 202.15 compared unfavourably with ITC’s Rs. 258.05 and Infosys’s at Rs. 929.30 per
share. Likewise, SBI’s Rs. 260 share compares unfavourably with HDFC Bank’s Rs.
1,286.95, on the same date. Few CPSUs & PSBs turned in profits that too owed to
monopolistic control of the market, e.g. petroleum and telecom. Most others lived off grants
and unending loans from the public exchequer with many having eaten away their net worth
several times over. Of course, such non-performance and habitual indebtedness was not
entirely the making of an entity's management, rather imposed upon them partly by
successive governments and dynamics of the economic environment. Yet professional
stewardship of these entities has seldom been questioned.
Simultaneously, whatever revenues were raised, lost a significant portion to sustaining
unsustainable PSUs/Autonomous bodies, foundation-stone projects by the thousands,
2. 2
unremunerative politically-motivated projects, write-down/waiver of loans advanced to
various entities, rampant delays in completion of public projects, private and public and a
giveaway culture of subsidies without much accountability. In fine, rising indebtedness has
therefore not translated, into the extent of on-ground development that should have happened.
Today the public exchequer is caught in a giant cleft, viz. the giant demands of development
versus availability of public finance, with the gap substantially widening every year and
causing an almost unbridgeable chasm to emerge in popular demand and their realization.
In 2014-15, the revenue deficit of the Govt. of India was Rs. 8.85 lakh crore. To cover this
deficit, the Govt. of India resorted to market borrowings of Rs. 6.82 lakh crore. As on Jan. 1,
2016, the public debt of the Govt. of India stood at a whopping Rs. 64.95 lakh crore. The
states accounted for another Rs. 143.23 lakh crore making a total of about Rs. 208 lakh crore.
At a conservative 7% interest rate and assuming 50% retired debt reduced by the amount of
state govt. debt annually, this could translate to a crippling Rs. 8-10 lakh crore in 2017-18
and eat away 40-42% of the total expenditure budget of all govts., provided states succeed in
retiring 50% of their previous debts during the year.
In addition, 30% of all non-development expenditure goes into salaries, establishment &
pensions. However, there is a caveat here. There are several lakh personnel - regular, casual,
temporary and contract - whose salaries and establishment costs are met from development
budget allocations like the cost of a field agricultural extension officer, his staff vehicle,
assistants, office expenses, mobile labs and computers, etc. In effect, interest, personnel and
establishment costs alone account for 80-85% of the full budget of governments in India,
leaving a paltry 15-20% for development on the ground. Leakages such as the recent fraud in
Assam of Rs. 2250 crores on nearly 150 ghost Anganwadis (creches) that were fraudulently
funded for Rs. 250 crore/annum for close to a decade, plague agriculture, energy, public
health, medical services and irrigation, reducing the money value of limited finances of
governments further and reduce development to fodder for electoral campaigns alone.
Where such borrowing and expenditure cause appreciable rise in GDP and capital formation
(hence income levels), budget deficits are seemingly justified even with relatively high
inflation at the initial stages, such as in Japan that reported an estimated 7.01% deficit in
2016. Attempts to peg the deficit artificially to low levels in a bid to curb inflation, is likely to
damage capital formation, as little else changes in the pattern of non-development (revenue)
expenditure, and low rise or even fall in GDP and capital formation could happen. This also
often leads to camouflaging non-developmental expenditure in the development category. In
the end, governments that borrow but disproportionately devote such funds to revenue
expenditure that have no return on investment, often run up high levels of debt. Owing to
excessive revenue expenditure, borrowing for capital items like roads, bridges, etc. becomes
inevitable. Every day of delay in commissioning projects runs a high potential of driving
governments to unsustainable indebtedness and default, as happened in Greece.
Unfortunately, India is gradually progressing into a cusp of indebtedness that hovered around
the 50% of GDP barrier in 2015-16. However, rising market borrowing, a large part of which
is diverted to revenue expenditure could adversely raise this ratio in the next 5-10 years to
unsustainable levels.
Media reports show that the default on commercial borrowings by the infrastructure sector is
alarming. While lenders are reticent to lend afresh, rising investigations and raids may be
additional major dampeners. What is worse is that cash surpluses available with the private
sector are not forthcoming owing to uncertainties in acquisition of land, revenue-sharing and
tolls, etc. In 2007, the India Infrastructure Report stated that India required about $320 billion
in 2007-12 to repair and add to its physical infrastructure. Similar moneys were required for
3. 3
capacity enhancement of our energy sector to meet a 55 billion unit energy shortage in 2006-
07. Therefore brakes such as the 3% deficit of GDP in Fiscal Responsibility & Budget
Management Acts may prove counterproductive unless sustainable and credible restrictive
corresponding steps are taken to curb government spending on its establishment and
personnel and severely curb rampant leakages while breaching the target deficit.
In 2014-15, there was a divestment bonanza that reduced market borrowings by govts. by
only about 6%. Although the lease of spectrum garnered about Rs. 50000 crore plus some
more in coal mine auctions, the revenues on these accounts were not substantial to
appreciably reduce market borrowings. The single major reason is that license fees become
payable in specified percentages every year over the long-term lease period (10-30 years) that
does not make much major positive impact in annual budgets that run into several lakh crore
Rupees each year. The overweening obsession for revenue generation, post-2G CAG telecom
report, has caused spectrum leases and FM radio licenses to net just about 10% of the
estimated amount, leaving a gaping hole of about Rs. 6.50 lakh crore in the Govt. of India’s
budget estimates. The 300% explosion in splitting Ministries/Depts. since 1947 has not
caused much appreciable improvement in governance and accountability either. Instead, it
has diffused responsibility vastly and slowed down decision-making. Unending command,
control and coordination chains have also had the undesired effect of enhancing rent-seeking
across levels, apart from rampant delays. Costs of administration have thus hardly kept pace
with revenues. Even assuming that Rs. 6.50 lakh crore were obtained, how much would have
gone to real sustainable development remains debatable.
There is pronounced political reticence to taxation and enforcement. Governments lose
several thousand crore each year owing to collusion between revenue officers and assessees.
There is very limited reconciliation of revenues between revenue collection agencies, their
accounts officers and receiving banks. CAG’s customs audit report for 2015-16 reports in 89
indirect tax commissionerates a gross amount of Rs. 6.20 lakh crore remained unreconciled.
Even if a single percent of revenue were not paid at all or showed as having been paid (using
forged bank stamps and pay-in forms), this would amount to a whopping Rs. 6200 crore,
enough for about 2.43 lakh jobs paying Rs. 20000 per month and bringing 4-5 times that
many people well above the poverty line. Owing to the cash basis of govt. accounting, the
quantum of revenue lost by lack of enforcement owing to their own ranks never figures in the
annual accounts. As if this were not enough, extortion at toll gates, takes its own toll as
legitimate revenues of the state are converted into private wealth and then applied to various
purpose, mostly illicit. Tax demand notices likewise are often inspired and adjudication often
ends up costing more than the settlement terms. All these while govts. live off borrowed
moneys.
While low global oil, commodity and shipping prices allowed the Govt. of India the luxury of
raising central excise on imported oil, 2016-17 and onward is seeing a rise to $60
dollar/barrel levels. This would invariably reduce the Govt. of India’s fund-raising capacity.
Cesses are not ad hoc substitutes for revenue collection by manufacturing that shows few
discernible signs of revival. Cesses collected over the years that ought to run into several lakh
crore, notably on education, are nowhere manifest in our educational institutions while state
spending steadily declines in this sector, as in many others. Govts. in India no longer have the
financial muscle to enhance spending much more nor incentivise consumer spending by tax
rebates notwithstanding political grandstanding. What then of alternative financing from
India’s financial institutions (FI)?
Defaulted dues are of type broad types, viz. non-performing assets (NPAs) and restructured
debts (CDRs). When a loanee fails to pay back principal and interest when instalments are
4. 4
due, nor is there any prospect of their business being revived by FI intervention, is declared
an NPA. On the other hand, CDRs are attempted bailouts by loaning FIs by extension of time
(e.g. owing to adverse business scenario, sudden change in state policies, etc.), conversion of
debt into equity or by management participation of the loanee entity. Over the years, PSBs
have suppressed their actual NPAs by the subterfuge of sanctioning many more loans than
those defaulted. CDRs partly supplemented PSB efforts by staggering declaration of NPAs in
misrepresentative but audited PSB balance sheets. GNPAs of PSBs in the last five fiscals rose
three-fold. As of Dec. 31, 2016, of every Rs. 100 loaned by PSBs, Rs. 11 is in default. These
figures do not include NPAs en route in the form of CDRs that may multiply this figure
alarmingly given the steadily worsening domestic and global economic scenario.
Recently, a former Dy. Governor of the RBI, Dr KC Chakrabarty, recently said that he
estimated that NPAs, as on date, were about Rs. 20 lakh crore. Obviously, this figure could
stretch into an unknown abyss and did not include historical loan waivers over the last 2-3
decades. Some PSBs like IOB & UCO Bank have GNPA in the range of 17-23%. For IOB,
gross bad loans are more than 2.5 times its net worth; both UCO Bank and United Bank of
India have eroded their net worth by at least double while IDBI Bank is 1.3 times negative in
its net worth. These worrisome figures also do not include loans given to projects where the
dates of commencement of commercial operations had passed but the projects had failed to
take off, presumably mostly in the infrastructure and telecom sectors.
At the same time, international conventions demand a minimum percentage of liquidity that
banks must maintain viz. Basel-III. Although PSBs currently comply with these norms, a
rapid rise in NPAs in the coming months, matched by poor recovery record, could cause them
to fall below these stipulations. The Indradhanush plan of the Dept. of Financial Services,
Ministry of Finance of Aug. 14, 2015 estimated the extra capital requirement up to 2019-20
at about Rs.1.80 lakh crore. This estimate was based on credit growth rate of 12% for the
current year and 12 to 15% for the next three years depending on the size of the bank and
their growth ability. It was also presumed that the emphasis on PSBs financing would reduce
over the years by development of vibrant corporate debt market and by greater participation
of Private Sector Banks. Accordingly, budget provision of Rs. 25000 crore each in 2015-16
and 2016-17 and Rs. 10000 crore each in 2017-18 and 2018-19 was proposed in Budget
2016-17. Owing to revenue shortfalls and rising revenue expenditure, the full amount has not
been paid in most fiscal years. This tendency would only be exacerbated in 2017-18 and
onward. Obviously, such ad hoc allocations for recapping PSBs take away development
funds from the public exchequer and are not a sustainable solution. Further, ever-rising NPAs
cast a shadow on the Dept. of Financial Services’ estimates of Rs. 1.80 lakh crore required
for recapping PSBs.
At the same time, Budget 2017-18 proposed the creation of a Distressed Assets Agency
(DAA) to which distressed loans of PSBs would be transferred and that would look for
buyers for them. Although the fine print on financial arrangements for DAA is not yet in the
public domain, there are grave doubts about Govt. of India’s ability to bankroll the share
capital for such entity. It is useful to remember that the collapse of Lehmann Brothers in
2008-09 in the US owed to its taking over distressed housing assets from Wall Street banks
and then not being able to sell them, although pay-outs for such takeovers were met by Wall
Street banks, acting individually or in consortium mode. A similar situation could happen if,
for instance, builders were to attempt to sell apartments and commercial buildings in the
ghost towns on the Greater Noida Expressway since the sale value would be appreciably
lower (maybe 40-60%) than what is owed to financing agencies, a very likely event. Even if
they refinanced their defaulted loans with fresh lower-interest ones from PSBs (after recent
interest rate cuts), no real accretion to infrastructure development would occur while the
5. 5
option of further default remains omnipresent. PSBs, now increasingly, under close watch of
vigilance and investigative agencies, are also loath to loan further funds.
With such huge pressure building on it, Govt. of India is left with very few options.
Accordingly, over the last year or so, relatively healthy CPSUs are mandated to return a
minimum 30% of their net profits to Govt. of India as dividend. With looming wage
revisions, many CPSUs that are holding companies are now resorting to milking their
subsidiaries for their cash balance to pay off dividend to the Govt. of India. For others whose
profits are recession-hit or minimal, the choice is to dip into their reserves. Recently, the
Ministry of Railways reportedly protested to the Finance Ministry against the latter’s demand
for transfer of Rs. 850 crore dividend earned by 14 Railway CPSUs after the merger of the
Rail and General Budgets in 2017-18, stating that such transfer would only add to the
shortfall in railway earnings. Compounding these is RBI’s recent decision to cut back its
dividend to 12% in order to absorb costs of printing new post-DeMo currency.
Govt. of India, mainly via its FIs, also owns large chunks of shares of the private corporate
sector. Companies/FIs like ITC (34.43%), ACC (14.66%), Axis Bank, L&T (45%), Bharti
Airtel, Gammon India (63.4%), Monnet Ispat (50.14%) and Tata Steel (19.66%) have several
lakh crore Rupees of govt. investment in them. Faced with an unenviable situation, the govt.
has now started divesting part of such holdings, some open market, and the rest being picked
up state FIs like LIC. Many relatively healthy CPSUs have also been coaxed in the last year
into buying back govt. shares that has reduced their liquidity further, at least till their next
IPO. Given the less than average performance of the stock market, offloading shares of
CPSUs is unlikely to garner huge resources, even when govt. has recently listed its four
general insurance companies. With President Trump promising large public-private sector
investments in America’s crumbling infrastructure, interest rates would invariably rise and
cause FDI to flow back from India to the safer confines of the US that may depress Indian
bourses even more, and, with it CPSU divestment offerings.
The layman understands that unless consumer incomes rise (with employment), demand will
remain depressed. In turn, this will depress manufacturing and along with it, supporting
services. Momentary spikes in GDP from increased revenue collection owing to extraneous
reasons are not much cause for optimism. A stasis has emerged in which all expecting fingers
are pointed toward govts. that do not have large-scale spending wherewithal any longer and
must rely on increasing borrowing. Stop-gap measures like the ones stated in the preceding
two paragraphs eat into the nation’s cash reserves, particularly when ploughed into revenue
expenditure and uncertain public projects. The Union Finance Minister’s job has never been
as unenviable, even in 1989-90.
The author is a senior public policy analyst and commentator