INSUBCONTINENT EXCLUSIVE:
of an expansionary economic policy and does not consider government's plan to keep fiscal deficit to 3.3 per cent of GDP as "sacrosanct",
a party spokesman told Reuters.Ahead of a general election that must be held by May and after a string of losses in recent state polls,
government run by Bharatiya Janata Party (BJP) has announced several stimulus measures for countryside where millions of farmers are
grappling with low crop prices
Other fiscal moves have been aimed at helping small businesses.The measures are likely to be a drain on finances in Asia's third-biggest
economy, though administration is expected to get Reserve Bank of India to agree to transfer an interim dividend of 30,000-40,000 crore
rupees to government by March, Reuters reported last week quoting sources.Weak consumer spending and fragile farm sector have already been a
drag on economic growth.The country lost 11 million jobs last year, with around 83 per cent in rural areas, according to independent
think-tank Centre for Monitoring Indian Economy, as operational costs surged for small businesses
Those costs were boosted by launch of a national sales tax in 2017 and economic impact of an earlier ban on high value currency
notes."There's a demand, there's a debate - all my colleagues are saying what's need of keeping fiscal deficit in check when there is
a distress in a particular sector," said Gopal Krishna Agarwal, economic affairs spokesman for BJP, referring to farm sector."Even
think-tanks associated with us are talking in this sense
Very few people domestically are talking about fiscal prudence
Only foreign think-tanks are talking fiscal prudence
I strongly believe an expansionary policy can benefit party," he said in an interview on Tuesday night.India's 10-year benchmark bond
yield rose 4 basis points to 7.53 per cent after news, its highest since January 8 on worries about fiscal deficit
The rupee also weakened to 71.23 to dollar from its previous close of 71.03.Agarwal, a chartered accountant who is a director at state-run
his party colleagues' thinking but that no final decision had been taken.D.S
Malik, a spokesman for Ministry of Finance, did not respond to calls and emails seeking comment
Finance Minister Arun Jaitley, who is in United States for a medical check-up, said in a Facebook post on Tuesday that India's "fiscal
discipline during past five years has been amongst best as compared to any preceding period".NEED TO REACH LANDLESSAgarwal said government
understands that farmers are in distress and that directly transferring money to their bank accounts was an option to help them out
He said government was, however, trying to figure out how to distribute funds to landless tillers to make sure any such transfer programme
was effective and didn't just benefit those with land.The government is studying a programme launched by Odisha under which farmers with
landholdings of up to 5 acres would get cash assistance to buy seeds, pesticides, fertilisers and pay for labour
Sharecroppers, who cultivate rented land will also get benefits, which include life insurance coverage.Agarwal said Modi and many financial
institutions were not in favour of waiving farm loans, as done by states recently won by Congress party, because doing so mainly helps banks
and not so much farmers in duress."There's definitely a suggestion to give interest-free loans to farmers
Banks won't have to pay, it has to be incorporated into budget," he said."And what's so sacrosanct issue about keeping fiscal deficit at
less than 3.5 per cent If you don't adopt an expansionary economic policy, then government alone can't create demand by just spending on
It has to come from both public and private sector
The economy will grow only when demand will be created."He said that increasing income tax exemption limit for individuals was also being
considered for interim budget to be presented on February 1 by Jaitley.William Foster, vice president at Moody's Investors Service, said
that it expects country's fiscal deficit to slip to 3.4 of GDP this fiscal year ending March 31 due to revenue shortfalls from goods and
services tax, lower excise duty and below-target receipts from sale of government assets."Increased expenditure on income transfers, farm
loan waivers or other forms of subsidies would weigh further on government finances," Foster told Reuters.
