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Mint
21-07-2025
- 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.
The Hindu
24-06-2025
- Politics
- The Hindu
The troubled waters of Godavari
A fresh row has erupted between Telangana and Andhra Pradesh over the Polavaram-Banakacherla Link Project. The project, which will divert 200 tmc ft of Godavari water to the Krishna and Penna basins, aims to provide drinking and irrigation water to the drought-hit Rayalaseema region of Andhra Pradesh. The Andhra Pradesh government has already submitted the pre-feasibility report on the project to the Central Water Commission (CWC). The CWC has now asked the State to now furnish a detailed project report (DPR). In addition, the Centre has offered to fund 50% of the total cost of the project, which is an estimated ₹80,000 crore, as part of the interlinking of rivers; the remaining will be financed through borrowing beyond the Fiscal Responsibility and Budget Management (FRBM) limits. This has upset Telangana as the Centre had reduced the State's borrowing limits under the FRBM Act citing the State's off-budget borrowings to complete the Kaleshwaram project on time. Both the Congress, which is in power in Telangana, and the Bharat Rashtra Samithi (BRS), which is in the Opposition, believe that the project violates the State's riparian rights regarding Godavari waters as well as the provisions of Andhra Pradesh Reorganisation Act, 2014. But the two parties are also busy blaming each other for 'allowing' Andhra Pradesh to plan the project. The other significant Opposition party in the State — the Bharatiya Janata Party (BJP) — has remained largely silent. This is possibly because the BJP government at the Centre has the support of the Telugu Desam Party, the ruling party of Andhra Pradesh. This, the Telangana government believes, has given the Andhra Pradesh government the advantage of getting things done with quick approvals from the Centre. Chief Minister A. Revanth Reddy and Minister for Irrigation N. Uttam Kumar Reddy squarely blamed the previous BRS government for Andhra Pradesh's decision to take up the Godavari diversion project. They cited the first apex council meeting of September 21, 2016, as evidence. That was when the then Chief Minister, K. Chandrasekhar Rao, had stated that 3,000 tmc ft of Godavari water discharges into the sea on average annually and could instead be utilised if there was an 'understanding' between the two States. The BRS objected to this argument saying Mr. Rao had also 'raised objections over the diversion of water from the Godavari to the Krishna without prior consultation of Telangana' during the same apex council meeting. Former Minister for Irrigation, T. Harish Rao, said that the Congress is deliberately misleading the people. He alleged that Andhra Pradesh was conspiring to divert Godavari waters to claim rights on it in the future by seeking re-allocation of water by the Godavari Water Disputes Tribunal. He termed the Congress government's 'soft approach' to the project as a 'mortgaging of Telangana's water rights' and said that this was 'Mr. Revanth Reddy's 'gurudakshina' to his political mentor N. Chandrababu Naidu'. Mr. Rao said that just as the late Y.S. Rajasekhara Reddy had diverted Krishna waters from Srisailam to the non-basin (Penna) areas by expanding the Pothireddypadu Head Regulator, now Andhra Pradesh Chief Minister Chandrababu Naidu was diverting Godavari waters at the cost of Telangana's riparian rights. Mr. Naidu emphasised that the project is essential. Arguing that the Godavari has ample surplus water, he asked why Telangana should object to the use of water that was anyway flowing into the sea. The BRS in turn demanded to know why the Andhra Pradesh government had objected to the Kaleshwaram project if ample water was indeed available in the Godavari. The President of the Telangana Retired Engineers' Association, M. Shyamprasad Reddy, suggested that the Centre carry out the appraisal of the Polavaram-Banakacherla Link Project only after protecting the rights of the people of Telangana by giving permissions/clearances/approvals to all the ongoing and contemplated projects in the Godavari basin. The former chief engineer also suggested that the Centre additionally allocate more than 200 tmc ft of water in the Krishna basin in lieu of the diversion of Godavari water to other basins. Water-sharing is a sensitive issue and is linked to the economy and regional sentiments. The Centre would do well to be as unbiased as possible when dealing with inter-State water disputes.
India Gazette
18-06-2025
- Business
- India Gazette
Govt's net borrowings under control, show steady trend: SBI Report
New Delhi, June 18 (ANI): India's market borrowing program has seen a stable and orderly evolution in recent years, with net borrowings remaining under control despite the country's growing economic needs. Data from a report by SBI showed that the government is actively managing its debt through various instruments while adhering to fiscal discipline under the FRBM Act. It said, 'G sec borrowing trend.... Keeping the borrowings in check.' As per the data, gross market borrowing through government securities (G-secs) is estimated at Rs 14.8 lakh crore in the Budget Estimates for FY26, while net borrowing is projected at Rs 11.5 lakh crore. So far in FY26, the government has raised Rs 3.2 lakh crore as gross borrowing, and Rs 2.4 lakh crore as net borrowing. In the previous financial year (FY25), gross borrowing stood at Rs 14.0 lakh crore, while net borrowing was Rs 10.7 lakh crore. Similarly, FY24 had seen gross borrowing of Rs 15.4 lakh crore and net borrowing of Rs 10.7 lakh crore. This shows that while gross borrowing fluctuates with fiscal needs, net borrowing is being kept largely in check. The report also highlighted that the outstanding stock of government debt through G-secs has steadily risen over the past decade, from Rs 41.6 lakh crore in FY15 to Rs 114.5 lakh crore so far in FY26. However, this surge has been managed with caution, and the government is making genuine efforts to reduce overall debt levels. The debt-to-GDP ratio is estimated at 57.1 per cent for 2024-25 and is projected to decline to 56.1 per cent in 2025-26, as per the FRBM guidelines. To fine-tune its borrowing profile, the report mentioned that the government is also using debt switch and buyback operations. In FY26, switch borrowings are budgeted at Rs 2.5 lakh crore, and buybacks have already accounted for Rs 0.5 lakh crore. In past years, switch operations ranged from Rs 0.3 to Rs 2.0 lakh crore, depending on the fiscal strategy. In the context of banking and finance, a debt switch typically refers to a transaction where a borrower exchanges one type of debt security for another, often with the goal of restructuring debt obligations or managing liquidity. While the buyback operations typically refer to the repurchase of government securities or corporate bonds by central bank (RBI). On this the SBI report noted a dichotomy in current trends. While issuing more short-term papers may support immediate funding needs for a fast-growing economy, it could lead to higher redemption pressure in the medium term. The report outlined that while India's public debt has grown in absolute terms, the government's prudent fiscal management, stable borrowing trends, and strategic tools like debt switches and buybacks are helping maintain long-term sustainability. With net borrowings under control and efforts aligned with FRBM targets, the overall debt outlook looks disciplined. (ANI)
Times of Oman
18-06-2025
- Business
- Times of Oman
Govt's net borrowings under control, show steady trend: SBI Report
New Delhi: India's market borrowing program has seen a stable and orderly evolution in recent years, with net borrowings remaining under control despite the country's growing economic needs. Data from a report by SBI showed that the government is actively managing its debt through various instruments while adhering to fiscal discipline under the FRBM Act. It said, "G sec borrowing trend.... Keeping the borrowings in check." As per the data, gross market borrowing through government securities (G-secs) is estimated at Rs 14.8 lakh crore in the Budget Estimates for FY26, while net borrowing is projected at Rs 11.5 lakh crore. So far in FY26, the government has raised Rs 3.2 lakh crore as gross borrowing, and Rs 2.4 lakh crore as net borrowing. In the previous financial year (FY25), gross borrowing stood at Rs 14.0 lakh crore, while net borrowing was Rs 10.7 lakh crore. Similarly, FY24 had seen gross borrowing of Rs 15.4 lakh crore and net borrowing of Rs 10.7 lakh crore. This shows that while gross borrowing fluctuates with fiscal needs, net borrowing is being kept largely in check. The report also highlighted that the outstanding stock of government debt through G-secs has steadily risen over the past decade, from Rs 41.6 lakh crore in FY15 to Rs 114.5 lakh crore so far in FY26. However, this surge has been managed with caution, and the government is making genuine efforts to reduce overall debt levels. The debt-to-GDP ratio is estimated at 57.1 per cent for 2024-25 and is projected to decline to 56.1 per cent in 2025-26, as per the FRBM guidelines. To fine-tune its borrowing profile, the report mentioned that the government is also using debt switch and buyback operations. In FY26, switch borrowings are budgeted at Rs 2.5 lakh crore, and buybacks have already accounted for Rs 0.5 lakh crore. In past years, switch operations ranged from Rs 0.3 to Rs 2.0 lakh crore, depending on the fiscal strategy. In the context of banking and finance, a debt switch typically refers to a transaction where a borrower exchanges one type of debt security for another, often with the goal of restructuring debt obligations or managing liquidity. While the buyback operations typically refer to the repurchase of government securities or corporate bonds by central bank (RBI). On this the SBI report noted a dichotomy in current trends. While issuing more short-term papers may support immediate funding needs for a fast-growing economy, it could lead to higher redemption pressure in the medium term. The report outlined that while India's public debt has grown in absolute terms, the government's prudent fiscal management, stable borrowing trends, and strategic tools like debt switches and buybacks are helping maintain long-term sustainability.
Time of India
18-06-2025
- Business
- Time of India
Govt's net borrowings under control, show steady trend: SBI Report
India's market borrowing program demonstrates stability, with net borrowings well-managed despite economic growth. The government adheres to fiscal discipline under the FRBM Act, utilizing instruments like G-secs, debt switches, and buybacks to fine-tune its borrowing profile. While public debt has increased, prudent fiscal management ensures long-term sustainability, aligning with FRBM targets. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India's market borrowing program has seen a stable and orderly evolution in recent years, with net borrowings remaining under control despite the country's growing economic from a report by SBI showed that the government is actively managing its debt through various instruments while adhering to fiscal discipline under the FRBM said, "G sec borrowing trend.... Keeping the borrowings in check."As per the data, gross market borrowing through government securities (G-secs) is estimated at Rs 14.8 lakh crore in the Budget Estimates for FY26, while net borrowing is projected at Rs 11.5 lakh far in FY26, the government has raised Rs 3.2 lakh crore as gross borrowing, and Rs 2.4 lakh crore as net the previous financial year (FY25), gross borrowing stood at Rs 14.0 lakh crore, while net borrowing was Rs 10.7 lakh crore. Similarly, FY24 had seen gross borrowing of Rs 15.4 lakh crore and net borrowing of Rs 10.7 lakh shows that while gross borrowing fluctuates with fiscal needs, net borrowing is being kept largely in report also highlighted that the outstanding stock of government debt through G-secs has steadily risen over the past decade, from Rs 41.6 lakh crore in FY15 to Rs 114.5 lakh crore so far in this surge has been managed with caution, and the government is making genuine efforts to reduce overall debt debt-to-GDP ratio is estimated at 57.1 per cent for 2024-25 and is projected to decline to 56.1 per cent in 2025-26, as per the FRBM fine-tune its borrowing profile, the report mentioned that the government is also using debt switch and buyback FY26, switch borrowings are budgeted at Rs 2.5 lakh crore, and buybacks have already accounted for Rs 0.5 lakh crore. In past years, switch operations ranged from Rs 0.3 to Rs 2.0 lakh crore, depending on the fiscal the context of banking and finance, a debt switch typically refers to a transaction where a borrower exchanges one type of debt security for another, often with the goal of restructuring debt obligations or managing liquidity. While the buyback operations typically refer to the repurchase of government securities or corporate bonds by central bank (RBI).On this the SBI report noted a dichotomy in current trends. While issuing more short-term papers may support immediate funding needs for a fast-growing economy, it could lead to higher redemption pressure in the medium report outlined that while India's public debt has grown in absolute terms, the government's prudent fiscal management, stable borrowing trends, and strategic tools like debt switches and buybacks are helping maintain long-term net borrowings under control and efforts aligned with FRBM targets, the overall debt outlook looks disciplined.
