Economy
GDP decline will challenge meeting fiscal deficit target: Government
The decline in nominal gross domestic product growth will create challenges for meeting the current fiscal deficit target of 3.9 percent of GDP, the government said on Friday.
 
"Slower than anticipated nominal GDP growth will itself raise the deficit target by 0.2 percent of GDP," the finance ministry said in its Mid-year Economic Review tabled in parliament.
 
"The anticipated shortfall in disinvestment receipts, owing to adverse market conditions for a portfolio that largely comprises commodity stocks, will add to the challenge," it said.
 
"Government is committed to carry the process of fiscal consolidation to its logical end. Fiscal consolidation has been designed with judicious mix of rationalisation of total expenditure as percentage of GDP and improvement in gross tax revenues as a percentage of GDP," the review added.
 
The government also said there may be a need to reconsider next year's fiscal deficit target of 3.5 percent as the benign fiscal situation and improving fiscal conditions have boosted growth this fiscal.
 
"However, GDP growth has been powered only by private consumption and public investment is a concern. The proposed wage hike for government workers may impact plan for next fiscal," the report said.
 
Finance Minister Arun Jaitley, in his February budget, had extended the target deadline for controlling fiscal deficit to three percent, contending that insistence on a timetable to contain it would harm growth prospects.
 
The targets have been set at 3.9 percent for 2015-16, 3.5 percent for 2016-17, and 3 percent for 2017-18.
 
India's fiscal deficit has touched 74 percent of the annual target as on end-October, even as tax revenue is below the half-way mark, as per the latest official estimates of the central government accounts released late last month.
 
The government also said retail inflation for 2015-16 is expected to be at 6 percent, while lowering its growth forecast for the Indian economy to between 7-7.5 percent.
 
"Next year we have said a fiscal deficit target of 3.5 percent that took into account the impact of the 7th Pay Commission, One Rank, One Pension, that was very much included in our modelling," Minister of State for Finance Jayant Sinha told reporters on Friday.
 
"We will absolutely meet our fiscal consolidation roadmap. We have said that the 3.9 percent fiscal deficit target this year is well in hand," he added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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ESIC's decision to open medical colleges ill-planned: CAG
The decision by the Employees State Insurance Corporation (ESIC) to open medical colleges was ill-planned and no due diligence was done, the Comptroller and Audit General of India (CAG) revealed on Friday.
 
The organisation also did not have any concept paper or project report to assess the viability of opening medical colleges or alternatives to cope up with the shortage of medical personnel in the ESIC hospitals, the CAG said. 
 
The revelation, which is part of a special report of CAG on ESIC, further said the number of sites selected for opening of medical colleges was disproportionate to the requirement of medical personnel.
 
"Due diligence, if any, carried out to ascertain the number of colleges required to be opened to fulfil the further requirement of doctors and other paramedical staff was not available," said the report presented in parliament.
 
"Due to no-uniformity in clauses in agreement with architectural consultants, ESIC was liable to pay extra consultancy fees Rs.24.68 crore. There were time and cost over-runs in majority of the medical education projects," said the report.
 
"Only 14 percent of the students passed out from post graduate institutes (PGI) joined the ESIC hospitals which indicated that the strategy of opening medical colleges for filing the vacant posts failed. 
 
"The decision to exit from this endeavour was only an exercise to limit the sunk losses and further liabilities." 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

SKRISHNAN

2 years ago

Reference CAG's Report on ESIC Hospital Project:
One wonders about the decision making process in such cases. Are there not Financial Advisers both in the organisation and the Ministry concerned, presumably the Labour Ministry, who should have been involved in the decision making process?!
How could they have allowed such a major proposal without even a Concept Note or a Project Report?!
Ultimately with only 14% joining the ESIC it is nothing short of a tragedy, if not a laughable joke! One wonders whether responsibility will ever be fixed, for such a monumental blunder!
S. Krishnan, IAAS (Retired)

Apple, Samsung Pay joins China's UnionPay
Apple, Samsung and China's UnionPay announced a partnership on Friday to bring the digital wallet of Apple Pay and Samsung Pay to China, cashing in on the popularity of such services in the country.
 
China UnionPay cardholders will be able to link their bank cards to Apple and Samsung Pay and make payments without cash or cards, Xinhua cited a joint statement from the companies as saying.
 
It said Apple and Samsung Pay will be made available to China UnionPay cardholders in early 2016 after certification by Chinese regulators.
 
Chinese third party payment firms handled online payments of 3.65 trillion yuan ($563 billion) in the third quarter, up nearly 11 percent from the previous quarter, according to research company Analysys.
 
Market leader Alipay has more than 400 million users, including 270 million who regularly make payments using mobile phones.
 
China UnionPay, which has issued more than five billion bank cards home and abroad, launched its own digital wallet for phones jointly with over 20 commercial banks last Saturday.
 
"China UnionPay is dedicated to promoting payment innovations and providing secure, convenient payment experiences for its hundreds of millions of cardholders, aligning multiple parties in the industry," said Chai Hongfeng, executive vice president of China UnionPay.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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