GDP (Gross Domestic Product) for quarter ended Dec’20 (Q3’FY21) recorded a marginal growth of 0.4% as per the data released by MOSPI (Ministry of Statistics and Programme Implementation) today. Even though the growth, after two quarters of decline of 24.4% and 7.3%, is a relief, it looks quite tentative. For one, this is lower than the general estimates of clocking 1-1.5%. Second, it was propped up by increase in government spending, without which, it would have again contracted. And most importantly, some important sectors continue to remain in the negative zone – leading to K shaped recovery – which can pull down other sectors if persists for long. The highlight of the quarter is strong pickup in financial & other services and construction, both of which grew at 6%+ after decline of over 7% in Q2’21. Here is a brief analysis of GDP and its constituents. Continue reading GDP, Dec’20 Quarter – Too Little To Celebrate…
Month: February 2021
Power Distribution Companies – The Elephant In The Room
Food Corporation of India – Managing Inefficiencies
Corporate Tax Exemptions – Desirable or Not?
Finance Commission Report – Understanding the Formula for Devolution to States
The report of 15th Finance Commission (FC), constituted every five years, was tabled in the parliament on the day of the budget. The Finance Commission is an important constitutional body which determines the flow of revenue from centre to states and more importantly, fix a formula for the distribution of total pie among different states. Role of the commission is critical as most of the taxes are levied at the national level and states’ own tax revenue is less than half of their expenditure. The devolution forms the bedrock of India’s federal structure, giving states financial independence. Here is a look at how the commission arrives at the division and other details. Continue reading Finance Commission Report – Understanding the Formula for Devolution to States
Budget – Deficit Terminologies, Trends And Sources of Finance
Budget – Revenue & Expenditure Analysis (Part II)
Budget – Revenue & Expenditure Analysis (Part I)
Buget 2021-22 – Not A ‘Never Before’ Budget
The budget for the year 2021-22, presented in the Parliament today, wasn’t quite the ‘never before’ budget as stated by the Finance Minister a few days back. To qualify for that, the minister should have found innovative ways to raise resources or ways to reduce expenditure while managing the same outcome. Or even, any path-breaking initiative to comprehensively monitor, review and audit all major government schemes and progressively reduce allocation on ineffective schemes. Yet, the budget has soothed nerves by not imposing any additional tax or Covid cess which gets reflected in the stock market movement. Here is a look at some of the highlights. Continue reading Buget 2021-22 – Not A ‘Never Before’ Budget