Latest news with #FRBM)Act
Mint
2 days ago
- Business
- Mint
CAG report flags discrepancies in the Centre's fiscal math
India's national auditor, Comptroller and Auditor General of India (CAG), has flagged several fiscal inconsistencies in the Union government's compliance with the Fiscal Responsibility and Budget Management (FRBM) Act, including a substantial ₹ 21.3 trillion in unrealized tax revenues at the end of 2022-23. The CAG's latest report, presented in Parliament on Monday, comes at a time when the government has committed to reducing India's fiscal deficit to below 4.5% of gross domestic product (GDP) by 2025-26, as reiterated in recent medium-term fiscal policy statements. However, the audit observations suggest gaps in transparency and data consistency that may undermine its fiscal credibility. The CAG's Report No. 3 of 2025, which assesses compliance with the FRBM Act for the year 2022-23, was earlier presented in the Rajya Sabha on 4 April. The FRBM Act, enacted in 2003 to ensure inter-generational equity in fiscal management and maintain macroeconomic stability, mandates the CAG to carry out an annual compliance review. According to the report, the amount of tax revenue raised but not realized rose by ₹ 5.47 trillion in 2022-23 over the previous year to ₹ 21.30 trillion. Of the ₹ 5.47 trillion, a staggering ₹ 5.28 trillion is not under dispute (meaning it was collectable but had not been recovered), suggesting weak tax enforcement or inefficiencies in recovery processes. A query sent to the spokesperson of the finance ministry did not elicit a response till press time. The CAG audit report also pointed to inconsistencies in key fiscal indicators. For instance, the fiscal deficit figure published in the Union government finance accounts (UGFA) for 2022-23 was ₹ 17.56 trillion, while the budget at a glance (BAG) for 2024-25 cited a lower figure of ₹ 17.38 trillion—a discrepancy of ₹ 18,000 crore. Similar variations were observed in statements on arrears of interest, loans and advances, and fiscal projections published in the half-yearly and medium-term fiscal policy statements, the CAG report highlighted. The amount of arrears of interest shown in the D2 Statement, ₹ 30,735.89 crore, varied from the amount reflected in the UGFA, ₹ 31,226.74 crore, resulting in a difference of ₹ 490.85 crore. The amount of loans to foreign governments in the receipt budget was ₹ 16,489.13 crore, whereas the UGFA showed ₹ 16,353.89 crore, a difference of ₹ 135.24 crore. For loans to states and Union territories, the receipt budget recorded ₹ 2,70,439.38 crore, and the UGFA recorded ₹ 2,70,367.60 crore, a difference of ₹ 71.78 crore. The fiscal deficit (budget estimates) in the medium-term fiscal policy statement was ₹ 16,61,196 crore, whereas in the annual financial statement, it was shown as ₹ 16,61,196.21 crore. Despite these shortcomings, the CAG report acknowledged positive signals on the debt front. Central government debt, which had peaked at 61.38% of GDP in 202-21 due to pandemic-related spending, declined to 57.93% by 2022-23. The CAG, in its report, noted that the pace of debt accumulation in recent years has been lower than GDP expansion, and the debt sustainability indicator for 2022-23 was positive. The ratio of interest payments to revenue receipts—an indicator of fiscal strain—rose marginally to 35.35% in 2022-23, after declining from a peak of 38.66% in 2020-21. The CAG audit report also found that additional guarantees issued by the Centre remained within the legal ceiling of 0.5% of GDP in 2022-23.
Indian Express
28-06-2025
- Politics
- Indian Express
‘Can't spoil children's future': Supriya Sule affirms NCP-SP's participation in ‘Three Language Policy' stir
Nationalist Congress Party (SP) leader Supriya Sule on Saturday affirmed the party's participation in the Hindi language imposition protest to be held on July 5, jointly organised by the Maharashtra Navnirman Sena (MNS) and Shiv Sena (UBT). While addressing reporters in Nagpur, Sule accused the Maharashtra government of 'attempting to spoil the future of children' by making Hindi compulsory up to Class 4 under the 'Three Language Policy'. She stressed that language education is an 'important social issue' and not a political one, which should be taken very seriously with the guidance of experts. On the Maharashtra government mandating Hindi as the default third language in schools, NCP(SP) MP Sule said, 'This is an important social issue for us. It is not a political issue. Language education is an issue that should be taken very seriously. We should move forward under the guidance of experts. No other state is working in this manner. I don't understand why Maharashtra is taking such an insistent stance. We cannot spoil the future of children to please someone. Nationalist Congress Party (Sharad Pawar) will participate in the march (announced by Shiv Sena-UBT along with Raj Thackeray) with full force. Education is a serious issue for us.' She also clarified that while a committee might have recommended Hindi, committees only provide recommendations, and the final decision rests with the government. She refuted claims that the decision was made during the Mahavikas Aghadi government Speaking on the issue of Shaktipeeth Mahamarga, Sule highlighted that the Finance Ministry has 'red-flagged' or noted concerns about the high cost of the project. She stated that the Shaktipeeth Expressway project's budget exceeds the limits set by the Fiscal Responsibility and Budget Management (FRBM) Act, and if the cost burden increases, '22% of the government's funds would be consumed solely by repayments,' she said. Shaktipeeth Mahamarga is touted as a transformative route connecting key religious and economic regions. She also pointed out that the loan for the Shaktipeeth Expressway project is being acquired at a higher interest rate, which is unusual for special projects that typically receive loans at 6.35 per cent. Furthermore, she mentioned considerable opposition to land acquisition in affected areas and that experts suggested upgrading the existing road instead of building a new parallel one. Sule found it 'a cause for serious concern' if the state's finance department is raising objections, likening it to a household spending significantly more than it earns. Sule also held a meeting with party workers in Nagpur to discuss the party's preparation for local body elections. Sule said, 'Any political party is ready for polls 24/7, and when they are not busy in elections, they are serving people. We will decide on names when the dates for local body elections approach.' During her visit to Nagpur, Sule also paid her respects to Dr Babasaheb Ambedkar at Deekshabhoomi.
Time of India
21-05-2025
- Business
- Time of India
Kerala not caught in debt trap, says finance minister Balagopal
Finance minister K N Balagopal on Wednesday rejected allegations that the state is caught in a debt trap, terming them politically motivated and factually incorrect. Balagopal told a news conference that the state's borrowings were well within the limits prescribed by Fiscal Responsibility and Budget Management (FRBM) Act and undertaken with Centre's approval. "We're only borrowing as much as required for development and welfare. In fact, our borrowings are lower than the ceiling set by Centre," he said. He said Kerala is permitted to borrow up to 3.5% of its Gross State Domestic Product (GSDP), but borrowed only 2.5% in 2022-23 and 2.99% in 2023-24. "Even the borrowing we were entitled to was curtailed by Centre," he said. Balagopal presented data to show that the state's debt-to-GSDP ratio declined steadily, from 38.47% in 2020-21 to a projected 33.9% in 2024-25. "This is evidence of improving fiscal health," he said. He acknowledged that total debt rose from Rs 2.96 lakh crore in 2020-21 to Rs 4.31 lakh crore in 2024-25. However, he said the GSDP expanded from Rs 7.79 lakh crore to Rs 12.75 lakh crore during the same period. "Our debt has not grown disproportionately. The size of our economy has increased significantly," Balagopal said. He also criticised the previous UDF govt. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Secure Your Child's Future with Strong English Fluency Planet Spark Learn More Undo "Between 2011 and 2016, GSDP growth was 11.6%, but debt grew at 14.9%. In contrast, under the present LDF govt, GSDP has grown at 13.5% and debt at only 9.8%," he said. Balagopal said the state's debt traditionally doubled every five years. "Following that trend, our total liabilities should have touched Rs 6 lakh crore by 2025-26. But thanks to tighter control and a more responsible borrowing policy, they are expected to remain around Rs 4.65 lakh crore," he said. "Even that would have been lower, had Centre not withheld funds we were legally entitled to borrow." Balagopal said Rs 3,300 crore was cut from Kerala's borrowing limit for providing guarantees to loans taken by PSUs, with Centre citing the Guarantee Redemption Fund (GRF). "Centre is now demanding that we earmark 5% of the total guarantees — worth around Rs 80,000 crore — as reserve in the GRF. This is an additional burden," he said.
