Relief measures vote to fail to improve the economy

Mumbai, Ta. August 28, 2019, Wednesday

A rating agency has lowered the country's economic growth estimate for the current fiscal year from 8.5 percent to 8.5 percent, stating that relief measures announced by the government last week to fuel the country's economy would not help. However, India ratings say the government can limit its fiscal deficit to 5.5 percent of GDP.

Despite the payment by the RBI to the government, the government has not had enough financial concessions which it can mobilize for fiscal incentives. The Reserve Bank has announced a dividend payment of Rs 5.5 trillion to the government for the current fiscal year.

The government plans to use the majority of this money received from the RBI to compensate for the tax revenue gap.

India is currently facing cyclical and fundamental challenges. Real estate is going through a bad time, home savings are falling, the private sector is currently struggling to survive the economy by investing alone for the government when it is unwilling to invest.

The math of demand and supply has been lost due to the reduction in domestic savings. Demand against supply is not enough. The private sector does not come forward to invest as capacity utilities are not increasing, the agency said in its report.


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