• Latest
  • Most Read
Just before budget, Modi government announces its fiscal intentions

Just before budget, Modi government announces its fiscal intentions

5 months ago
Meet SP Singla, the “mastermind” of Bhagalpur collapse

Meet SP Singla, the “mastermind” of Bhagalpur collapse

13 hours ago
Balasore Tragedy: The heroes vs vultures

Balasore Tragedy: The heroes vs vultures

14 hours ago
Nitish Kumar is the uncrowned king of broken bridges

Nitish Kumar is the uncrowned king of broken bridges

14 hours ago
Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

19 hours ago
Dear relatives of freedom fighters, just being a relative doesn’t make you the know it all

Dear relatives of freedom fighters, just being a relative doesn’t make you the know it all

1 day ago
Clear, unambiguous and brutal: Draupadi Murmu’s message to CJI

Clear, unambiguous and brutal: Draupadi Murmu’s message to CJI

1 day ago
5 Actors who ruined a Franchise as Replacement

5 Actors who ruined a Franchise as Replacement

4 days ago
Rolls Royce Controversy

Rolls Royce Controversy: Another UPA scam on the cards

4 days ago
Rahul Gandhi speech: BJP’s star campaigner is back in action!

Rahul Gandhi speech: BJP’s star campaigner is back in action!

4 days ago
Sportspersons careers

5 Indian Sportspersons Who Destroyed Their Own Careers

4 days ago
Bending rules to save the corrupt, the Congress way

Bending rules to save the corrupt, the Congress way

4 days ago
Wrestlers Protest

Modi govt. has done what it should have done a long ago with the Toolkit Gang

4 days ago
There’s more to Goa than just Feni and Vindaloo

There’s more to Goa than just Feni and Vindaloo

4 days ago
Kamal Haasan and Naseeruddin Shah: The ‘Tubelights’ of Indian Cinema

Kamal Haasan and Naseeruddin Shah: The ‘Tubelights’ of Indian Cinema

4 days ago
Annamalai Padyatra

How K Annamalai’s ‘Padyatra’ can achieve the impossible?

4 days ago
  • About us
  • Careers
  • Brand Partnerships
TFI Official Merchandise
TFI हिन्दी
TFI Global
Tuesday, June 6, 2023
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    Meet SP Singla, the “mastermind” of Bhagalpur collapse

    Meet SP Singla, the “mastermind” of Bhagalpur collapse

    Balasore Tragedy: The heroes vs vultures

    Balasore Tragedy: The heroes vs vultures

    Nitish Kumar is the uncrowned king of broken bridges

    Nitish Kumar is the uncrowned king of broken bridges

    Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

    Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    Report on India: Morgan Stanley gives double thumbs up to Modinomics

    Report on India: Morgan Stanley gives double thumbs up to Modinomics

    India's GDP

    Nominal GDP Growth at 16.1%? National Statistical Office releases India’s Economic accomplishment

    Vada Pav is Just the Tip of the Iceberg: A look into the rich culinary delights of Maharashtra

    India’s Resilience: A Zero Percent Chance of Recession

    Indian PSUs

    Once a butt of all jokes, Indian PSUs are posting better results than Fortune 500 companies

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    new CBI director Praveen sood biography

    Who is Praveen Sood the New CBI Director: Professional Background, Achievements and Significance of the Appointment

    Paramjit Singh Panjwar shot dead

    Paramjit Singh Panjwar shot dead: Keep calm and trust the Indian Armed Forces

    Swarm satellites

    India’s Bold Step towards Satellite Swarm Intelligence: A New Era in Space Technology

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Modi is the boss

    Modi is the boss: “Vedic Mantras” and an ocean of crowd: PM Modi’s Australia tour will echo till eternity

    PM Modi Extends a Diplomatic Olive Branch: A Special Message for Zelensky

    PM Modi Extends a Diplomatic Olive Branch: A Special Message for Zelensky

    NIA High Commission in UK

    NIA will probe the attack on Indian embassy, in UK!

    UK Student Visa rule new

    UK Student Visa Rules: International Students Barred from Bringing Families

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    5 failed Inventions

    5 Inventions that failed to serve their purpose

    What Do You Mean by Bhulekh Uttar Pradesh & Why Should You use It?

    What Do You Mean by Bhulekh Uttar Pradesh & Why Should You use It?

    5 Accidental Inventions

    5 Accidental Inventions that have become essential in our lives

    Sengol Tamil Nadu real picture

    What is Sengol: Tamil Nadu Connection, History, Significance and why it is to be installed in New Parliament

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    Dear relatives of freedom fighters, just being a relative doesn’t make you the know it all

    Dear relatives of freedom fighters, just being a relative doesn’t make you the know it all

    5 Actors who ruined a Franchise as Replacement

    5 Actors who ruined a Franchise as Replacement

    Sportspersons careers

    5 Indian Sportspersons Who Destroyed Their Own Careers

    There’s more to Goa than just Feni and Vindaloo

    There’s more to Goa than just Feni and Vindaloo

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    Meet SP Singla, the “mastermind” of Bhagalpur collapse

    Meet SP Singla, the “mastermind” of Bhagalpur collapse

    Balasore Tragedy: The heroes vs vultures

    Balasore Tragedy: The heroes vs vultures

    Nitish Kumar is the uncrowned king of broken bridges

    Nitish Kumar is the uncrowned king of broken bridges

    Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

    Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    Report on India: Morgan Stanley gives double thumbs up to Modinomics

    Report on India: Morgan Stanley gives double thumbs up to Modinomics

    India's GDP

    Nominal GDP Growth at 16.1%? National Statistical Office releases India’s Economic accomplishment

    Vada Pav is Just the Tip of the Iceberg: A look into the rich culinary delights of Maharashtra

    India’s Resilience: A Zero Percent Chance of Recession

    Indian PSUs

    Once a butt of all jokes, Indian PSUs are posting better results than Fortune 500 companies

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    new CBI director Praveen sood biography

    Who is Praveen Sood the New CBI Director: Professional Background, Achievements and Significance of the Appointment

    Paramjit Singh Panjwar shot dead

    Paramjit Singh Panjwar shot dead: Keep calm and trust the Indian Armed Forces

    Swarm satellites

    India’s Bold Step towards Satellite Swarm Intelligence: A New Era in Space Technology

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Modi is the boss

    Modi is the boss: “Vedic Mantras” and an ocean of crowd: PM Modi’s Australia tour will echo till eternity

    PM Modi Extends a Diplomatic Olive Branch: A Special Message for Zelensky

    PM Modi Extends a Diplomatic Olive Branch: A Special Message for Zelensky

    NIA High Commission in UK

    NIA will probe the attack on Indian embassy, in UK!

    UK Student Visa rule new

    UK Student Visa Rules: International Students Barred from Bringing Families

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    5 failed Inventions

    5 Inventions that failed to serve their purpose

    What Do You Mean by Bhulekh Uttar Pradesh & Why Should You use It?

    What Do You Mean by Bhulekh Uttar Pradesh & Why Should You use It?

    5 Accidental Inventions

    5 Accidental Inventions that have become essential in our lives

    Sengol Tamil Nadu real picture

    What is Sengol: Tamil Nadu Connection, History, Significance and why it is to be installed in New Parliament

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    Dear relatives of freedom fighters, just being a relative doesn’t make you the know it all

    Dear relatives of freedom fighters, just being a relative doesn’t make you the know it all

    5 Actors who ruined a Franchise as Replacement

    5 Actors who ruined a Franchise as Replacement

    Sportspersons careers

    5 Indian Sportspersons Who Destroyed Their Own Careers

    There’s more to Goa than just Feni and Vindaloo

    There’s more to Goa than just Feni and Vindaloo

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
No Result
View All Result

HOME » Economy » Just before budget, Modi government announces its fiscal intentions

Just before budget, Modi government announces its fiscal intentions

Abhishek Kumar Singh
by Abhishek Kumar Singh
29 December 2022
in Economy
0
Just before budget, Modi government announces its fiscal intentions
271
VIEWS
Share on FacebookShare on Twitter

It is generally assumed that a budget is a cost and account statement. It is partly that but its significance is much more than simple accounting. The budget making process is itself a tedious task, especially in the aftermath of Covid-19. In India, the biggest concern is that of ensuring a sound fiscal deficit, without causing social and economic hurt.

PMGKAY shunned

Few days ago, the Modi government decided to discontinue the much successful Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). Now, 81.35 crore Indians won’t be availing free food under the emergency measure. Instead, the government will now make free food available to them under the statutory National Food Security Act (NFSA). Earlier, beneficiaries of NFSA were getting rice at Rs 3 per kg, wheat at Rs 2 per kg and coarse grain at Rs 1 per kg. During Covid, all these beneficiaries were getting free food over and above these subsidised ones under PMGKAY.

To put it simply, people will keep getting free food, irrespective of the fact whether PMGKAY is in action or NFSA. Even foreign Minister S. Jaishankar took to twitter to announce the same. He wrote, “Food grains to be made available free of cost to more than 800 million beneficiaries till Dec 2023 under National Food Security Act.”

Important decisions in meeting of the Cabinet today:

-Food grains to be made available free of cost to more than 800 million beneficiaries till Dec 2023 under National Food Security Act.
Will ensure India’s food security.

— Dr. S. Jaishankar (@DrSJaishankar) December 23, 2022

Checking the viability of scheme

The decision has raised certain questions about its effectiveness. At the end of the day, people are getting free food. It means that there is virtually no change in on-ground reality, but there is a big change in perception of the government as PMGKAY has been shunned for now. In 2023, 10 states will go for elections and it means that the opposition can use it to show BJP as anti-poor. Moreover, on the face, it looks as if it is an old wine in a new bottle as the responsibility of free food has been shifted from one scheme to another.

However, the scheme was untenable in the long run. It had an in-built potential for corruption. PMGKAY provided 5 kg of grain per person over and above 5 kg already available under NFSA. Think about it, 10 kg of grain was being available to every person per month. Only a person undergoing intense physical training would consume such an amount. Government found that a substantial chunk of these grains was sold in black market, especially after economic recovery came in full swing.

Economic reasoning behind discontinuation

Economic recovery is also a big reason why the government has felt emboldened to end it. India’s nominal GDP is expected to grow by 14.1 per cent, more than 11.1 per cent estimated in budget. They are reflected in the government’s tax collections as well. Direct tax collections until October were up by 24 per cent in Y-o-Y terms. Indirect tax collections are also on a similar trajectory.

All these numbers should have meant that the government could work towards bringing down the fiscal deficit. Fiscal deficit is total spending minus total income. It is essential for foreign investments. In pre-pandemic period, the government had brought it down to 3.4 per cent of GDP in FY20. But, Covid changed it. The deficit for FY21 skyrocketed to 9.3 per cent. Next year, it improved to 6.7 per cent, but mainly on account of higher tax collection.

Fiscal astuteness is ultimate goal

The target is to bring it down to make our macroeconomic fundamentals sounder. However, PMGKAY took a heavy toll on the centre’s expenditure. During the first six phases of the scheme in place, it cost Rs 3.45 lakh crore to the government’s exchequer. It had become fiscally difficult to implement after the fifth phase. But the government kept pushing it and continued it for 2 more phases. The total cost has now increased to nearly 4 lakh crores. It costs around 40-44 thousand crore to the government for extending it on a 3-months basis. The cost is fiscally sustainable, but not after the Ukraine-Russia crisis.

The fertiliser shortage in the international market has increased our fertiliser subsidy bill by more than 100 per cent. Along with 1.09 lakh crore for fertilisers, Finance Minister Sitharaman also presented a further demand of Rs 80,345 crore of supplementary demand on food. Majorly on the account of these two factors, the total subsidy bill has gone up to Rs 532,446.79 crore. It is way over budget estimate and second highest after 7.6 lakh crore of subsidy bill of FY21, the Corona year.

The need to minimise subsidy spending is there. Govt. has been spending Rs 1.6-1.8 lakh annually on PMGKAY. It has come to an abrupt and relieving end. Yes, the government won’t get nearly the Rs 10,000 crore it was getting by selling grains under NFSA, but the net result is still a savings of Rs 1.5 lakh. That is a big number for bridging the fiscal deficit gap.

The fiscal deficit is one of the strongest determinants of macroeconomic fundamentals. Worsening it for the sake of a scheme which has high chance of misuse is not feasible.

Support TFI:

Support us to strengthen the ‘Right’ ideology of cultural nationalism by purchasing the best quality garments from TFI-STORE.COM

Also Watch:

Tags: BudgetFiscal DeficitFoodGDPGovernment SchemeModi governmentNFSAPMGKYtax
ShareTweetSend
Previous Post

All the times, Aadhaar was discussed in Supreme Court

Next Post

CCI is taking on corporate criminals like never before

Abhishek Kumar Singh

Abhishek Kumar Singh

Truth Seeker. Columnist at TFI Media.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

  • Most Read
  • Comments
  • Latest
Xi Jinping, coronavirus, Shinzo Abe, china, Japan, coornavirus, COVID-19, Wuhan Virus

‘Pack up and get out of there,’ Japan to spend $2.2 billion to get Japanese companies to exit China

9 April 2020
ajay devgn karan johar

The man who bullied the Bully – How Ajay Devgn made Karan Johar’s monopoly a joke and forced him to apologize

22 June 2020
Huawei, China, Trump, USA, Xi Jinping

‘Our survival is at stake now,’ Chinese Telecom giant Huawei crumbles after US ban on Semiconductor exports

19 May 2020
T-Series Sonu Nigam Divya Khosla Kumar Bhushan Kumar

T-Series forced to take down Atif Aslam’s video, Divya Khosla trolled. T-Series has a bad day in office

25 June 2020
Meat Ban

A Jain responds to Meat Ban in Mumbai

Public Sector Bank, Government, Bill

Dear bank employees, continue your stride but PSBs will be privatized

anti-Hindi

Anti-Hindi Forever?- In search of a National Language!

Dear Liberals – your Beef Parties are not protests, they just intend to displease the Majority

Dear Liberals – your Beef Parties are not protests, they just intend to displease the Majority

Meet SP Singla, the “mastermind” of Bhagalpur collapse

Meet SP Singla, the “mastermind” of Bhagalpur collapse

5 June 2023
Balasore Tragedy: The heroes vs vultures

Balasore Tragedy: The heroes vs vultures

5 June 2023
Nitish Kumar is the uncrowned king of broken bridges

Nitish Kumar is the uncrowned king of broken bridges

5 June 2023
Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

Goyal Best. Nitish Worst – A Comparative Analysis of Railways Ministers since 1998

5 June 2023

Popular This Week

5 Actors who ruined a Franchise as Replacement
Cinema

5 Actors who ruined a Franchise as Replacement

by TFIPOST News Desk
2 June 2023
Sportspersons careers
Sports

5 Indian Sportspersons Who Destroyed Their Own Careers

by TFIPOST News Desk
2 June 2023
Wrestlers Protest
Politics

Modi govt. has done what it should have done a long ago with the Toolkit Gang

by Animesh Pandey
2 June 2023
Inspector Avinash
Cinema

“Inspector Avinash”: Randeep Hooda Shines in a Hidden Gem of a Web Series

by Animesh Pandey
31 May 2023
Clear, unambiguous and brutal: Draupadi Murmu’s message to CJI
Politics

Clear, unambiguous and brutal: Draupadi Murmu’s message to CJI

by Pratyush Madhav
5 June 2023

©2023 TFI Media Private Limited

  • Terms of use
  • Privacy Policy
  • Sitemap
No Result
View All Result
  • Premium
  • Politics
    • Analysis
    • Opinions
    • Trending
  • Economy
    • Business
    • Finance
  • Defense
    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
TFI Official Merchandise
TFI हिन्दी
TFI Global
  • About us
  • Careers
  • Brand Partnerships

©2023 TFI Media Private Limited

Follow us on Twitter

and never miss an insightful take by the TFIPOST team

Follow @tfipost