Debt and Deficit

1.Formulas2.Figures3.Fiscal repression

Debt

Other liabilities

Public Debt

Total Liabilities

•Total Receipts•Revenue •capital

•Total Expenditure•Revenue•capital

Budget Deficit

•Total Receipts•Revenue •capital

•Total Expenditure•Revenue•capital

Budget Deficit

Budget Deficit

borrowing

Sukhmoy Chakravarti: 97-98

Budget Deficit

Fiscal Deficit

+ Market Borrowing

- Interest Payments

Primary Deficit

Fiscal deficit, primary deficit

પ્રભા�વી� મહે સુ�લ ખા�ધ

Revenue Expenditure - Receipts

Revenue Deficit

- Grants for Capital Asset creation

Effective Revenue deficit

Fiscal Revenue

Eff. Revenue Primary

FRBM Act

Revenue deficit

0% by 31/3/2008

fiscal deficit3% of GDP by 31/3/2009

FRBM Act 2003

2012 amendmentERD 0% => 2015, 31st MarchFD 3% => 2017,31st March

FRBM

Fiscal Revenue

Eff. Revenue Primary

2006Fiscal Responsibility and Budget Management Act (FRBMA) concerns with __.

A. Fiscal deficit onlyB. Revenue deficit onlyC. Both fiscal deficit and revenue

deficitD.Neither fiscal deficit nor revenue

deficit

CAPF 2014Data presented in Interim Budget for 2014 — 2015 reveal that for the financial year 2013 — 2014, the revised estimates do not show a decline in ____.A. Revenue deficitB. Effective revenue deficitC. Fiscal deficitD. Primary deficit

CAPF 2014Data presented in Interim Budget for 2014 — 2015 reveal that for the financial year 2013 — 2014, the revised estimates do not show a decline in ____.A. Revenue deficitB. Effective revenue deficitC. Fiscal deficitD. Primary. deficit

High CADHigh Fiscal DeficitEconomic Survey: improved

Twin Deficit

Economic surveyReforms in Public Debt

Management • Ch.2 Issues and priorities• Ch.3 Public Finance

Public Debt => SLR, G-Sec to LIC/EPFO

Less return (~8%)Less incentive in Financial assetsMore investment in gold, real estate, overseas

Financial Repression વિવીત્તી�ય દમન

2012: household savings 7% of GDP2012: total borrowing by Union + State = 7.1%

“resource pre-emption” for private sector

More reliance on ECB => Currency volatility

NPA

Financial Repression વિવીત્તી�ય દમન

Solution: Public Debt Management authority

PDMA will sell G-Sec on voluntary basis

Same recommendationsVijay Kelar (13th FC) Justice BN Srikrishna (FSLRC)Sweden, NZ, Germany, Denmark etc have similar.

Financial Repression વિવીત્તી�ય દમન

2011: bill, but not passed2014Interim budget proposed Non-statutory PDMA (1/4/2014) but regime change

Economic Survey recommends samefull budget silent

Financial Repression વિવીત્તી�ય દમન