Railway Budget short on politics, long on economics

Freight rates to be linked to fuel price; funds to be raised from surplus land assets; tariff authority on cards

Railway minister P.K. Bansal says the proposal to set up an independent tariff regulatory authority will be taken up by an inter-ministerial panel. Photo: Ramesh Pathania/Mint

New Delhi: In his maiden budget, railway minister Pawan Kumar Bansal boldly undertook another round of fare revisions and also committed to the politically sensitive decision of monetizing Indian Railways’ surplus land assets by selling some to private developers and generating an estimated Rs.1,000 crore in revenue.

In the process, he chose pragmatism over political grandstanding, ignored populist claims from his own party and risked earning the wrath of his own constituency.

Bansal effected an across-the-board increase in freight rates, and also indexed future rates to the price of fuel. The minister chose not to increase passenger fares, which were raised last month, but did effect a 50% increase on an array of booking charges.

The minister also promised the setting up of a tariff regulatory authority; an inter-ministerial body is discussing the proposal and is expected to sign off on it shortly, Bansal disclosed in the post-budget press conference.

“We looked at the actual position prevailing on the ground and acted accordingly. I did not want to make high promises.

Rohit singh
PGDM 2 nd sem.

Railway Budget short on politics, long on economics

Freight rates to be linked to fuel price; funds to be raised from surplus land assets; tariff authority on cards

Railway minister P.K. Bansal says the proposal to set up an independent tariff regulatory authority will be taken up by an inter-ministerial panel. Photo: Ramesh Pathania/Mint

New Delhi: In his maiden budget, railway minister Pawan Kumar Bansal boldly undertook another round of fare revisions and also committed to the politically sensitive decision of monetizing Indian Railways’ surplus land assets by selling some to private developers and generating an estimated Rs.1,000 crore in revenue.

In the process, he chose pragmatism over political grandstanding, ignored populist claims from his own party and risked earning the wrath of his own constituency.

Bansal effected an across-the-board increase in freight rates, and also indexed future rates to the price of fuel. The minister chose not to increase passenger fares, which were raised last month, but did effect a 50% increase on an array of booking charges.

The minister also promised the setting up of a tariff regulatory authority; an inter-ministerial body is discussing the proposal and is expected to sign off on it shortly, Bansal disclosed in the post-budget press conference.

“We looked at the actual position prevailing on the ground and acted accordingly. I did not want to make high promises. It is a realistic budget,” Bansal said.

Last year, a similar effort to shore up the revenue of Indian Railways by Dinesh Trivedi, a minister belonging to the Trinamool Congress, was aborted after he was sacked unceremoniously by his party chief, Mamata Banerjee , for violating the party line that ruled out any fare hike.

Given Bansal’s approach, the capital investments he has laid out are modest. The downside of this, especially given the multiplier effect that spending by the railways generates in the economy and the rickety state of rail infrastructure, is that the 160-year-old institution will have to defer its modernization plans. Then, with markets looking for signs of fiscal prudence, some would say that this may well be the right decision for now.

Bansal’s moves have predictably stoked expectations that the Congress-led United Progressive Alliance is choosing economics over politics.

Interestingly, this is the first time in 17 years that the Congress, or for that matter any national party, has taken charge of the ministry; regional parties that have been part of the coalition have run the ministry and often invited the charge of preferring to play politics with the institution that is India’s biggest employer—it has 1.4 million employees.

Bansal’s budget proposal on pricing will mean that fuel-linked revisions in passenger and freight rates will happen once in six months.

Back of the envelope calculations show that this will translate into an increase of 4-8 paise per kg on freight rates across commodities including coal, cement and iron ore, according to Vijaya Kanth, financial commissioner, Indian Railways.

She added that the net inflationary impact of the fuel-freight linkage will be 0.35%.

“Against the backdrop of elections and slowing economic growth, the minister has not presented a very pessimistic scenario,” said Rajeev Jyoti, chief executive of Larsen and Toubro Ltd’s railway business. “The bottom line to me is that he has presented a budget which looks optimistic. Yet, he recognizes the challenges that the railways is facing at the moment.”

The minister is trying to target freight to generate funds and linking diesel prices to freight rates is an indication of that, Jyoti said. “He is unlikely to rationalize the passenger fares any further in near future. We do not expect that,” he added.

The tweaking of freight rates will also have an impact on the price of power.

“The tariff increase on coal transportation will have a minimal impact on power generation costs in the country. We expect the impact to be in the range of around 1% of the overall electricity tariff,” said Amol Kotwal, associate director (energy and power systems practice for South Asia) at consulting firm Frost and Sullivan.

The minister, however, exempted passengers from the fuel-linked price increase this time around and absorbed the Rs.850 crore impact on this account. “As regards passenger fares, since these were revised only in January this year, I do not intend to pass on the additional burden to them now and railways will absorb the impact,” Bansal said.

Still, he more than made up for this through an increase in booking charges for passenger tickets. Vinay Mittal, chairman of Railway Board, said the estimated additional revenue on account of these charges is pegged at Rs.881 crore. This move prompted protests from some members of the Lok Sabha. “If they (opposition) were to look at it (budget) dispassionately, there is no reason for them to get agitated over the budget, I admit that one can’t possibly meet all the expectations,” Bansal said.

Significantly, and perhaps for the first time in its history, Indian Railways will make an effort to monetize its land bank, which is controlled by the Rail Land Development Authority.

Mittal said that 30-35 blocks of land across India had been identified. “We are working to see how we can commercialize this land either for residential or commercial purposes. This, however, may not contribute much to the overall revenue stream steadily,” he said.

Indian Railways, Mittal added, could potentially generate about Rs.2,000 crore to begin with, clarifying that it would not sell any piece of land, but only lease it out after proper tendering.

The railways has managed to significantly improve its operating ratio to 88.8% in 2012-13 from 95% a year earlier. For the next fiscal, Bansal has targeted a further improvement to 87.5%. Officials said this year’s improvement was achieved by controlling spends across verticals. Kanth said that for the first time in 25 years, the railways had not sought any supplementary grants beyond the gross budgetary allocation from the finance ministry. However, she added that the actual planned expenditure had beenRs.8,000 crore less than budgeted for.

Although the railways will miss this year’s revenue targets both from the freight and passenger segments, Bansal said he has budgeted for Rs.93,400 crore by way of freight earnings and Rs.42,200 crore from passenger ticket sales. This year, the railways is expected to earn nearly Rs.86,000 crore from freight andRs.32,500 crore from the passenger segment.

It has accounted for Rs.6,000 crore to be investment from public-private partnerships.

The ministry has proposed to set up manufacturing and repair facilities at Rae Bareilly in Uttar Pradesh; Bhilwara, Bikaner and Pratapgarh in Rajasthan; Sonipat in Haryana; Kurnool in Andhra Pradesh; Mirsod in Madhya Pradesh; Kalahandi in Orissa; and in Chandigarh, Bansal’s constituency.

Utpal Bhaskar and Amrit Raj contributed to this story.

TOUHID HUSSAIN

PGDM 2nd SEM

Forget about tax rates, look at a different set of numbers

Households must realize that their micro problems have their roots in the macro issues of deficits, inflation, subsidies and the efficacy of government expenditure

The money is there for the government to spend, but how it spends this and how effective that spending is, are questions that this educated, opinionated urban mass affluent slice of population must now ask. Photo: Priyanka Parashar/Mint

Updated: Wed, Feb 27 2013. 08 59 AM IST

Despite the budget-day hysteria, in which there has been an increasing focus on the household and its reaction to the event, the average Indian home has very little to do with the annual expenditure and revenue statement of the government, also known as The Budget.

I also think that attention has been focused on the wrong part of the budget speech, as far as the household is concerned. The part that gets the most attention is the one that deals with the revenue side of the budget, where the focus is on income tax. We worry about tax slabs, exemption limits and tax rates. But there has been no big change for the last 14 years in the marginal rate of income tax that has stayed at 30%. The only changes have been more of a tinkering in the form of a cess here, a surcharge there, of differential tax thresholds for men, women, or the introduction of a “very senior citizen” category in the last budget (this one still baffles me).

It made sense for the household to watch the budget speech for relief when the tax rates were exorbitant and a slash in them meant some real savings. If you were in the marginal tax bracket of 97.5%, as was the rate in 1971 (on no less than 11 tax slabs!), it really mattered when that came down to 77% in 1974-75. And then, again, it made a difference when the next big slash came to make the top rate 50% in 1985-86 when the number of tax slabs went from eight to four. But the tax regime has been stable now for many years and, perhaps, we should focus on some other parts of the budget that have a much deeper impact on the household than tax rates.

The urban mass affluent household has been badly affected by the slowdown in the Indian economy, by inflation that takes away all real return from savings, by the stagnancy in jobs and entrepreneurial opportunity, by the high cost of capital and by the fairly repressive financial regime that treats it as the milch cow for cheap money for the government’s spending splurge.

This household must now realize that its micro problems have their roots in India’s macro issues of deficits, inflation, subsidies and the efficacy of government expenditure. The money is there for the government to spend, but how it spends this and how effective that spending is, are questions that this educated, opinionated urban mass affluent slice of population must now ask.

Our attention must shift from the revenue side that deals with tax rates and their incidence, to the expenditure budget. Where does the government spend its money and how efficiently does it spend this for the goals of the nation that we broadly agree to when we elect a government?

Why, for instance, is over 20% of the total expenditure of the government going towards interest payments and as much as 13% towards subsidies and less than 1.5% for social services, including health and education, are all good questions to ask. It should ask why the government spends more and more to meet current expenses rather than using this for building national assets and infrastructure.

The Indian household is a prudent one. We look very carefully at where our money goes and what we spend it on. No wonder our savings rates have been so high. I’m calling for an intelligent and educated extension of that focus on the goals of our annual budget exercise and to hold the government to account for the money spent.

Finally, where ever it comes from—direct taxes or indirect or from printing more money—it is you and I who pay, either as taxes or in higher prices through inflation and on negative returns on our deposits. The 99% was a powerful movement in the US in that it gave a pithy slogan to the multi-dimensional economic issues faced by the average worker. We need one in India that will encapsulate our need to bring the country’s leaders to account for our money that they spend.

The Indian urban mass affluent has begun to build muscle in the last few years. The public outpouring against corruption and in support of women’s safety issues are symptomatic of a deeper change in the psyche of the middle class. If earlier, the middle class dream was to escape from the stagnant economy, that option is no longer there. We understand that there is nowhere to go. This is all we’ve got. And if we don’t mess it up, this is where global growth is for the next 30-40 years. We’ve discovered our voice for the most pressing of national issues at the moment, but we could extend that voice and generate wider public opinion to put pressure on economic issues. When we do that, let’s not waste it on plaintively asking for lower taxes. We should use it to push for government accountability on the expenditure side of the budget.

Monika Halan works in the area of financial literacy and financial intermediation policy and is a certified financial planner. She is editor, Mint Money, and Yale World Fellow 2011. She can be reached at
expenseaccount@livemint.com

TOUHID HUSSAIN

PGDM 2nd SEM

IIMT COLLEGE OF MANAGEMENT

budget in the shadow of record current account deficit

Managing the current account deficit has to be at the centre of the budget and this strategy has to be two-pronged

Manas Chakravarty

First Published: Thu, Feb 21 2013. 04 06 PM IST

The problem is that the current account deficit is high at a time when investment is very low, which means that increasing investment, which is needed to boost growth, runs the risk of inflating the external deficit. Photo: Mint

Also Read

Updated: Fri, Feb 22 2013. 12 03 AM IST

Mumbai: The second quarter of 2012-13 saw a current account deficit of 5.4% of the country’s gross domestic product (GDP). The third quarter is likely to see a current account deficit of around 6% of GDP. And just to remind everybody, the deficit was 3% of GDP in 1990-91, the year of the country’s worst balance of payments crisis. This year’s budget is being prepared under the lowering shadow of a record current account deficit.

Why is that important? Well, the Reserve Bank of India (RBI) believes the country’s sustainable current account deficit is 2.5% of GDP. It’s far above that level now, and the massive gap has to be financed through capital inflows, which makes the Indian economy completely dependent on the kindness of foreigners. Any loss of confidence in India’s growth prospects, any lessening of global risk appetite, and fund flows to the country’s markets could start drying up, dragging down the rupee and leading to a stampede for the exits. The price of imports will rise, inflation will go up, growth will slow, companies that have borrowed abroad will totter, and we could see a vicious backlash. It’s a huge risk, as rating agency Moody’s Investors Service recently underlined. And don’t forget that we have the general election in 2014, so political uncertainty is likely to weigh on inflows. The finance minister has only a small window of opportunity. He must make the most of it.

That means managing the current accou

budget in the shadow of record current account deficit

Managing the current account deficit has to be at the centre of the budget and this strategy has to be two-pronged

Manas Chakravarty

First Published: Thu, Feb 21 2013. 04 06 PM IST

The problem is that the current account deficit is high at a time when investment is very low, which means that increasing investment, which is needed to boost growth, runs the risk of inflating the external deficit. Photo: Mint

Also Read

Updated: Fri, Feb 22 2013. 12 03 AM IST

Mumbai: The second quarter of 2012-13 saw a current account deficit of 5.4% of the country’s gross domestic product (GDP). The third quarter is likely to see a current account deficit of around 6% of GDP. And just to remind everybody, the deficit was 3% of GDP in 1990-91, the year of the country’s worst balance of payments crisis. This year’s budget is being prepared under the lowering shadow of a record current account deficit.

Why is that important? Well, the Reserve Bank of India (RBI) believes the country’s sustainable current account deficit is 2.5% of GDP. It’s far above that level now, and the massive gap has to be financed through capital inflows, which makes the Indian economy completely dependent on the kindness of foreigners. Any loss of confidence in India’s growth prospects, any lessening of global risk appetite, and fund flows to the country’s markets could start drying up, dragging down the rupee and leading to a stampede for the exits. The price of imports will rise, inflation will go up, growth will slow, companies that have borrowed abroad will totter, and we could see a vicious backlash. It’s a huge risk, as rating agency Moody’s Investors Service recently underlined. And don’t forget that we have the general election in 2014, so political uncertainty is likely to weigh on inflows. The finance minister has only a small window of opportunity. He must make the most of it.

That means managing the current account deficit has to be at the centre of the budget. The strategy has to be two-pronged—taking steps to reduce the current account deficit on the one hand, and ensuring that the confidence of international investors in the Indian economy is boosted on the other, so that capital inflows to cover the deficit are adequate.

The current account deficit is the gap between domestic savings and investment. But the problem is that the current account deficit is high at a time when investment is very low, which means that increasing investment, which is needed to boost growth, runs the risk of inflating the external deficit. A high current account deficit at a time of low growth also indicates that the problem is structural in nature. The finance minister can do little, in the short term, to remove the supply bottlenecks that have led to higher imports, such as a shortage of coal, the increased use of diesel, or the mess in iron ore. He can do little about oil prices or oil imports in the short term without affecting growth.

What can he do then? He could take measures to increase domestic savings. Shrinking the fiscal deficit is one way of doing that. That will also increase the leeway for RBI to cut interest rates. But if the deficit is cut by reducing subsidies, it will lead to higher administrative prices, increasing inflation. Higher tax receipts cannot be taken for granted, because the reasons holding back growth are supply-side bottlenecks that will take time to resolve and the recovery is likely to be slow as a result. He could, however, go in for a tax on the very rich. Cutting non-Plan expenditure is essential, but unfortunately a large part of the Centre’s expenses are more or less fixed. In short, while it’s absolutely necessary to reduce the fiscal deficit and the finance minister has already indicated he’ll aim for it to be 4.8% of GDP in 2013-14, a large part of the improvement will have to come from non-tax receipts, such as divestments.

It is not just the government that needs to save more—the financial savings of households have gone down from 12% of GDP in fiscal 2010 to 8% of GDP in fiscal 2012. This trend has to be reversed, by giving more incentives to people to save in financial instruments. The finance minister must give sops for exports, which will improve the trade deficit. He could also increase the import duty on gold. And he could lay out the timeline for the implementation of the goods and services tax.

What can the finance minister do to ensure that capital inflows remain robust? One, he could announce measures that would help the capital markets, which would support his divestment agenda and allow foreign institutional investors’ funds to flow into debt markets, lowering interest rates. He must try and get domestic investors back into the markets. And secondly, he could outline in his speech his agenda for further reforms, such as the pension and insurance Bills, freeing up foreign direct investment further, and making the tax code more investment friendly. Finally, the markets will not take kindly to more populism.

Ultimately, credible supply-side structural reforms, not all of which can be addressed by the budget, are needed to restore confidence in the economy. Will the finance minister do his bit? This is after all the last full budget before the 2014 election and there will be pressure on him to play to the political gallery. The hope is that the government has in recent months taken several reformist steps, albeit only after it was pushed to the wall by the threat of a ratings downgrade. That threat persists and the reforms momentum needs to be carried forward in the budget. If it isn’t, it won’t be long before the slowdown snowballs into a crisis.

Sebi cautions investors, public against dealings with Sahara

Sebi says those transacting with Sahara will be doing so at their own peril

Sebi said in a public notice that investors and general public are advised to exercise caution and take note of the said orders before transacting with the aforesaid entities/persons in any manner whatsoever. Photo: Mint

                New Delhi: Close on the heels of ordering attachment of bank accounts, investments and all other assets of two Sahara group firms and their promoters, including group chief Subrata Roy, market watchdog the Securities Exchange Board of India (Sebi) on Friday cautioned the investors and general public against transacting with these companies and persons.

“Anyone transacting with them (Sahara India Real Estate Corp Ltd, Sahara Housing Investment Corp Ltd and their three promoters and directors) would be doing so at their own peril,” Sebi said.

The regulator said that in furtherance to a Supreme Court order directing refund of investors’ money collected by these Sahara firms, it has ordered “attachment of all moveable and immoveable properties, bank accounts and demat accounts of these two companies and that of its promoters and directors namely Subrata Roy Sahara, Vandana Bhargava, Ashok Roy Choudhary and Ravi Shankar Dubey”.

“Investors and general public are advised to exercise caution and take note of the said orders before transacting with the aforesaid entities/persons in any manner whatsoever,” Sebi said in a public notice.

On 13 February, Sebi passed two separate orders, together running into 160 pages, directing attachment of properties and freezing of accounts. It was after the Supreme Court said that the regulator was free to freeze the accounts and attach properties if Sahara firms were not complying with the apex court’s earlier orders of August 2012 towards refund of investors’ money totalling over Rs.24,000 crore.

The assets ordered to be attached included those related to the group’s Aambey Valley resort town near Pune, other real estate assets in Delhi, Mumbai and at other places across the country, shares, mutual funds and various other investments.

Passing the attachment orders, Sebi said that the two companies had raised Rs.6,380 crore and Rs.19,400 crore, respectively from bondholders and “various illegalities” were committed in raising of these funds.

With regard to Subrata Roy and three other directors, namely Vandana Bhargava, Ravi Shanker Dubey and Ashok Roy Choudhary, Sebi ordered freezing of all bank and demat accounts of these four persons, as also attachment of all moveable and immoveable properties in their name with immediate effect.

Subsequently, the Sahara Group claimed that the actions taken by Sebi were based on “old facts” and the orders for attaching assets of individuals is incorrect on part of the market regulator. It also said that it has already deposited with Sebi an amount of Rs.5,120 crore that was in excess of its total liability towards refund to investors.

Later, the group also ran a major advertisement campaign in newspapers with claims that “Sahara has nothing to pay (and) rather Sahara shall soon be eligible to take a big refund from Sebi” and it was submitting to Sebi the provisional balance sheets of two companies as on 31 December 2012 for more clarity on the matter.

The Supreme Court on 31 August 2012 had asked Sahara group firms to refund the money with 15% interest and had asked Sebi to facilitate the refund.

However, the group in December, 2012 was allowed to pay the money in three instalments, including an immediate payment of Rs.5,120 crore, followed by an instalment of Rs.10,000 crore in the first week of January and remainder by the first week of February 2013.

Sebi in its attachment orders, however, said that neither of the two instalments was paid and therefore it is constrained to take necessary action as per the Supreme Court orders.

The properties being attached by Sebi include the land owned by Sahara group firm Aamby Valley Ltd, which has set up a resort village near Pune, development rights of land at prime locations in Delhi, Gurgaon, Mumbai and various other places across the country.

Besides, Sebi has also ordered attachment of equity shares held in Aamby Valley Ltd, units of mutual funds, bank and demat accounts and investments in all the branches of all banks.

Sebi has asked all the banks to transfer the amounts lying in the accounts of these entities and persons to a specially—created Sebi-Sahara Refund Account. Sebi has also informed RBI and Enforcement Directorate as well regarding its actions against Sahara group firms.

The assets being attached include investments of SIRECL and SHICL in group companies, special purpose vehicles and partnership firms and the necessary orders for sale of all attached properties would be passed in due course after getting their full particulars, Sebi said.

Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with Sebi. Mint is contesting the case.

 

 

TOUHID HUSSAIN

PGDM 2nd SEM

IIMT COLLEGE OF MANAGEMENT 

Budget 2013 choices give less room for rate cuts, fears RBI

MUMBAI: The country's austerity push in a budget to be unveiled on Thursday threatens to have the unintended impact of adding to inflationary pressure, hampering chances for rapid interest rate cuts that the government wants, central bank officials said.

The government plans to cut public spending by up to 10 percent in the fiscal year starting in April, officials involved in the budget preparations told Reuters last week, as Finance Minister P. Chidambaram struggles to bring down the fiscal deficit to 4.8 percent of gross domestic product and stave off a credit rating downgrade.

Yet, officials in the Reserve Bank of India fear that cutting capital spending on projects with strong multiplier effects like building roads and bridges, won't help revive growth, which is seen as a priority if the economy is to avoid a downward spiral.

And they also worry that maintaining populist spending on subsidies for food, fuel, fertiliser and cooking gas will push up prices. While this spending, fuels consumer demand, especially for food, it is also a key driver of inflation in India.

"If spending on social schemes comes at the expense of capital expenditure, it will be bad," an official with direct knowledge of policymaking told Reuters. "Inflation will go up, and there will be food inflation from the demand side."

But with an election just a year away, Prime Minister Manmohan Singh's beleaguered government, facing a backlash for raising fuel prices as well as a string of corruption scandals, is in a bind.

It needs to get its fiscal house in order, but cutting the outlay on populist schemes would alienate voters, already upset over stubbornly high inflation.

"Given that election is around the corner, it would be difficult for the government to cut its social outlay. Cutting investment expenditure is a soft target," a second official involved with monetary policy-making told Reuters.

Asia's third-largest economy is on track to grow as little as 5 percent in the fiscal year that ends next month, its worst in a decade, even as inflation remains sticky near 7 percent.

To get the economy going, the government should ideally be spending on infrastructure, which would in turn kick start stalled private sector investment.

Investment in technology, better transport and storage for India's vast agriculture sector could also help dampen supply-side inflation pressures by reducing wastage.

Instead, some of the savings on capital investment planned in the budget will be reallocated to help fund a $22.27 billion food security bill, officials have told Reuters.

The central bank has privately expressed its discomfort to the finance ministry over high government spending towards consumption.

"The RBI wants less non-planned expenditure and more capital expenditure because it supports growth," a third senior official said. Non-planned expenditure refers mostly to subsidies and consumption-based spending.

None of the officials wanted to be identified because they are not allowed to speak to media.

The RBI is also concerned about a trillion rupee ($18.42 billion) cash hoard that the government has piled up during the closing weeks of the current fiscal year as it desperately tries to bring the fiscal deficit within a targeted 5.3 percent.

Economists believe the government is holding onto the cash so it will be able to borrow less in 2013/14, and keep the credit rating agencies at bay.

The trouble is that taking that money out of circulation instead of putting it to work puts another drag on an economy already losing momentum, and dilutes the impact of a recent rate cut as banks keep deposit rates high in order to attract funds.

The RBI has long resisted pressure from the government to cut interest rates, but relented slightly in January by reducing its policy repo rate by 25 basis points to 7.75 percent.

Making its first cut in nine months, the central bank warned that high food prices could exacerbate inflation in the latter half of 2013.

After that cut and fall in the annual inflation rate to 6.62 percent in January, the lowest in three years, economists have stuck with expectations that interest rates will only be able to come down another 0.75 percentage point over the course of the year.

Chidambaram wants the RBI to cut rates further to stimulate growth and in the bargain reduce the fiscal deficit, which would in turn lower government borrowing and spur private investment. That argument could be at risk if the central bank isn't convinced that inflation is under control.

RBI Governor Duvvuri Subbarao made clear last weekend, while attending a G20 summit in Moscow, that the central bank is looking beyond the headline figure of the government's budget deficit, and examining the type of spending cuts planned.

"It's very important, for growth to accelerate and for inflation to remain contained, that investments take place. For private investment to take place the government has to spend on capital expenditure, on infrastructure," Subbarao said.

"So while we look at the headline fiscal deficit number in the budget, we will look also at the quality of fiscal adjustment in determining our monetary policy stance."


ABDUL WAHEED
PGDM 2nd SEM.
IIMT COLLEGE OF MANAGEMENT