Govt plans to cut spending to curb shortage, may hurt growth: Report

Govt plans to cut spending to curb shortage, may hurt growth: Report

NEW DELHI: India’s government is likely to cut spending for the current fiscal year by as much as $2 trillion ($27.82 billion) as it faces one of the largest tax shortfalls in recent years, three government sources said.

Asia’s third largest economy, which is growing at its slowest pace in over six years due to lack of personal investment, could be hurt further if the government cuts spending.

But with a revenue shortfall of about $2.5 trillion, the government has little choice to maintain its deficit within”acceptable limits”, the first official, who didn’t want to be named, told Reuters.

The government has spent roughly 65 percent of the whole expenditure target of $27.86 trillion till November but reduced the pace of spending in October and November, according to government data. A $ 2 trillion reduction will be about a 7% cut in total spending planned for the year.

In October and November, government spending increased by $1.6 trillion, nearly half the $3.1 trillion it invested in September. The fiscal year starts 1 April and ends 31 March.

Deficiency of demand and weak corporate earnings growth in the economy led to lagging tax collections this year. Analysts said growth will be hurt.

India’s economic growth slowed for six consecutive quarters to 4.5% in July-September, despite a 135-basis-point cut in interest rates by the central bank since February 2019.

Now, even the Reserve Bank of India (RBI) seems to have become more worried about inflation rising. It maintained its key lending rate on hold December, though it slashed its growth forecast to 5 percent, which would be the lowest in a decade for the current fiscal.

Even a surprise corporate tax rate cut this year, announced by Finance Minister Nirmala Sitharaman failed to spur investment.

The government is very likely to keep the fiscal deficit under 3.8percent of gross domestic product, sources said, while letting it slide from its earlier set goal of 3.3% for the year.

The government is likely to announce additional borrowing of 300 billion to $50,000 crore for the current year to coincide with the revised financial deficit, two resources in the government said.

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Congress’ big plan – cow day-care centers in UP

Congress’ big plan – cow day-care centers in UP

But those aren’t the moves she has made in Uttar Pradesh.

The UP Congress team attended a five-day workshop, from 16 to 20 December, under the tutelage of Chhattisgarh Chief Minister Bhupesh Baghel, ThePrint has learnt. In the wake of the visit, at the peak of the party unit’s schedule now is setting up cow shelters to take on the Yogi Adityanath-led government on the problem of stray cattle, party sources told ThePrint.

The party intends to collect donations for the initiative and has hunted the approval of Priyanka. She has agreed to explore the issue, the sources said.

UP Congress chief Ajay Kumar Lallu, however, told ThePrint that no decision has been taken yet.

This is not the first time that the cattle issue has been discussed by the featured Uttar Pradesh Congress unit. In the first meeting in October of Priyanka, the members had requested for the stand of the celebration clear on cows kanwariyas and Ram Mandir.

The solution is now being drawn up based on the Chhattisgarh model.

‘We were shown the daycare shelters built by the Chhattisgarh government ‘ one of the leaders present at the workshop advised ThePrint. ‘It was recommended we start in UP to tackle the stray cattle problem something similar. It will be on a scale that is much smaller because we’re not in power.’

The stray cattle problem has hit farmers hard causing a’cow crisis’ under the BJP government. Having the fear of vigilante groups and a cow slaughter ban in place, they can sell old cows nor transfer them. Moreover, based on the 2019 Livestock Consensus, the gain in the number of stray cattle has also taken a toll on the populace of native breeds of cattle, which showed a 6 per cent decrease since livestock owners shifted focus to buffaloes.

The Chhattisgarh playbook

The UP Congress unit hopes to draw from the plans of the party in Chhattisgarh that propelled it to electricity after 15 year in the wilderness, in 2018. Since taking power, CM Baghel was careful to attack the RSS rather than the BJP, while at exactly the same time playing his Roman roots and his committed pujas.

‘The idea is to work the way the Congress did in Chhattisgarh. They countered the BJP, the Naxalites and the RSS to bolster the presence of the party there,’ said the first boss.

A leader present at the meeting said they were advised to embrace Baghel’s strategy of opposing the RSS rather than the BJP. ‘It’s the RSS and individuals like Mohan Bhagwat who want to split the country,’ the second leader said. ‘The BJP has no ideology of its own. Their entire ideology comes in the RSS.’

Part of the strategy also includes taking on BJP and RSS icons such as M.S. Golwalkar and V.D. Savarkar.

‘Jinnah and Savarkar wanted two nations on lines, not the Congress,’ said the next leader. ‘We will also remind folks that a letter from Mahatma Gandhi was in charge of getting Savarkar.’

Those present in the meeting said the state unit created a strategy to counter the’misinformation’ peddled about the Congress from the BJP.

‘We will counter their facts with the fact,’ said the first boss. ‘They say Nehru accounts for the situation in Kashmir, but Nehru accounts for bringing Kashmir into India’s ambit. If Nehru had not withheld the army till Maharaja Hari Singh signed the accession accord, Kashmir might not have become a part of India.’

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