To meet the projected 5.3% fiscal deficit, North Block has forced other ministries to cut down their planned expenditure by around 10% on an average. So far this fiscal, the government has spent only 96% of its budgeted expenditure
The Reserve Bank of India said the government’s cash balance with it will cross the Rs1 trillion- mark this fiscal, with the finance ministry likely to save an additional Rs5,000 crore through the remaining part of this financial year.
“The government’s cash balance is quite comfortable and as per the Budget estimate, it will increase by additional Rs5,000 crore over the last year’s closing balance. They will be building a slightly higher cash balance. Current level is around Rs1 trillion,” RBI deputy governor HR Khan, who is in charge of the government finances department at Mint Road, told reporters at the post-Budget press meet.
The cash balance numbers are interesting as normally the government and the RBI do not officially share the cash balance of the government parked with the central bank.
It can be noted that to meet the projected 5.3% fiscal deficit, North Block has forced other ministries to cut down their planned expenditure by around 10% on an average. So far this fiscal, the government has spent only 96% of its budgeted expenditure.
RBI deputy governor says the government will manage FY14 government borrowing
Finance minister P Chidambaram pegged the fiscal deficit at 5.2% for this financial year and 4.8% for the next fiscal.
Another deputy governor Urjit Patel, while hailing the Budget as offering “a credible roadmap for fiscal consolidation and lowering inflation,” said the fiscal deficit measures will go a long way in fighting inflation as well as fiscal correction.
In this regard he also welcomed the proposal to launch inflation-indexed bonds, which will help fight inflation. The press briefing was also attended by another deputy governor Anand Sinha.
If today’s low holds, the Nifty may make a laboured attempt to reach 5,850
The low growth in January was on account of negative growth in the production of crude oil, natural gas, fertiliser and cement, government data showed
The eight core sector industries grew by 3.9% in January this year, up from 2.2% in the same month in 2012. The growth of eight core sector industries had declined to 2.6% and 1.8% in December 2012 and November 2012 from 4.9% and 7.8%, respectively.
However, the cumulative expansion of these industries in April-January period of 2012-13 slowed to 3.2% from 5% in the same period previous year, according to the official data released today.
The eight industries include crude oil, petroleum refinery products, coal, electricity, cement and finished steel and have a weightage of 37.9% in the overall Index of Industrial Production (IIP).
“The low growth in January was on account of negative growth witnessed in the production of crude oil, natural gas, fertiliser and cement,” it said.
Production of natural gas and crude oil contracted by 16.8% and 0.2%, respectively, in the month under review. Fertiliser output too shrunk by 9.1% against 4% growth in January 2012.
Cement output dipped by 6.6% in January 2013 from 10.9% growth in the same period last year.
Coal output slowed by 2.3% from 7.7% in January 2012.
However, petroleum refinery output and steel production grew by 10.5% and 9.4% against 4.6% and 4.5%, respectively, in January 2012.
Electricity generation too gew by 5.9% in the month under review.
Belying expectations of recovery, economic growth slipped further in the July-September quarter to 5.3%, raising fears that the slowdown may pull down the annual growth rate to decade's low level.