GROSS FISCAL DEFICIT
Maharashtra, Gujarat, Karnataka lead in new state rankings; Goa tops smaller states list
Maharashtra, Gujarat, and Karnataka lead India's states in overall performance, according to a CareEdge Ratings study evaluating economic, fiscal, and other key parameters. Western states excel in finance and economy, while Southern states perform strongly in environment and governance. Goa tops the smaller states category, showcasing robust social development indicators.
South Korea proposes $8.6 billion extra budget to underpin growth amid tariff turmoil
South Korea unveils an $8.6 billion supplementary budget to combat economic headwinds from the global trade war and domestic political instability. Acting President Han Duck-soo highlighted concerns about liquidity issues for companies due to U.S. tariffs and sluggish domestic demand.
China's Q1 GDP grows 5.4% y-o-y beating expectations, but US tariff shock dims outlook
China's first-quarter GDP growth surpassed expectations at 5.4%, driven by strong consumption and industrial output. However, escalating U.S. tariffs pose a significant threat, potentially impacting exports and overall economic stability. Analysts anticipate a slowdown in growth for 2025, prompting concerns and expectations of further stimulus measures from Beijing to mitigate the trade war's effects.
States want eighth Central Pay Commission to pay heed to their views
States are urging the upcoming eighth Central Pay Commission to consider their perspectives alongside the Centre's before finalizing recommendations. Several states have already submitted inputs, highlighting the broader economic impact of pay revisions on state finances, public sector undertakings, and pension bills.
India’s GDP likely to dip 30-60 bps in FY26 amid US tariffs, but opportunities ahead
India’s GDP growth could face a setback of 30-60 basis points this fiscal year due to the US imposing reciprocal tariffs on 60 countries, possibly leading to a global economic slowdown. While exports may be impacted, India’s lower dependence on them and potential market share gains in certain sectors could mitigate the effects.
America is headed for a grim fiscal breakdown
The US is facing a fiscal crisis with government spending vastly exceeding tax revenue, leading to soaring public debt. Without intervention, debt may exceed 200% of GDP in 30 years. Congress needs to prioritise deficit reduction through moderate tax increases and spending cuts to avoid severe economic consequences.
Fiscal deficit at 85.8% of revised annual target till Feb
The Centre's fiscal deficit till February of this financial year reached 85.8% of the revised annual target owing to controlled spending, especially in capital expenditure. With a fiscal deficit largely in line with revised estimates, analysts predict it might meet or fall below the GDP target of 4.8%.
Centre to borrow Rs 8 lk cr in 1st half of FY26 through dated papers
The Centre will borrow ?8 lakh crore via dated securities in the first half of the next fiscal year to fund its revenue gap. This amount includes ?10,000 crore through sovereign green bonds. The borrowing consists of various tenures, with weekly tranches and options to retain additional subscriptions to help stabilize financing without disrupting the bond market.
In US tariff war, India should follow the nations with ‘saner voices’: Former finance minister Chidambaram
P Chidambaram criticised the government's approach to the impending US tariff war, arguing against protectionism and for aligning with nations like Canada, Britain, France, Germany, and Japan. He highlighted issues such as unemployment, inflation, and fiscal deficit, while welcoming reductions in customs duties. Chidambaram warned that concessions and flattery of President Trump won't work.
Parliament approves Finance Bill 2025, completes Budget FY26 exercise
The Rajya Sabha has returned the Finance Bill 2025 to the Lok Sabha with 35 government amendments, including the abolition of a 6 per cent digital tax on online advertisements. The Union Budget 2025-26 proposes a total expenditure of Rs 50.65 lakh crore and sets the fiscal deficit target at 4.4 per cent of GDP.
State debt to hit Rs 94 lakh cr: Report
States' debt in India is expected to reach ?94.4 lakh crore by March 2025, comprising 32.7% of GSDP, and to further climb to ?103.6 lakh crore by FY26, driven by capital expenditure and a growing revenue deficit according to a CareEdge Ratings report. Fiscal deficit is anticipated to decline to 2.7% of GSDP in FY25.
Lok Sabha passes Finance Bill, 2025 after including 35 government amendments
The Lok Sabha passed the Finance Bill 2025, including 35 amendments, such as abolishing a 6% digital tax on online ads. The total expenditure for 2025-26 is Rs 50.65 lakh crore, with a projected fiscal deficit of 4.4%. Capital expenditure is set at Rs 11.22 lakh crore, while resources for states will increase by Rs 4.91 lakh crore.
Indonesia finance minister denies resignation rumours amid stocks plunge 7%
Indonesian stocks fell as much as 7.1% on Tuesday and the rupiah slid to a two-week low against the dollar, pressured by concerns over the government's fiscal strategy and growth prospects a day before a central bank review of monetary policy.
India's merchandise trade deficit will be under pressure in fiscal 2026, services sector to provide respite: Crisil
India's merchandise trade deficit is set to face pressure in fiscal year 2026 due to strong domestic private consumption inflating imports, and potential export declines amid a slowing global and US economy. The resilient service trade surplus will offer some cushion, but heightened risks from US tariffs persist.
Central taxes as a proportion of total revenue receipts have reduced significantly: Tamil Nadu Finance Minister
Tamil Nadu Finance Minister Thangam Thennarasu highlighted the significant reduction in central transfers from the Union Government during the state budget presentation for 2025-26. This reduction has strained state finances, with funds being withheld and minimal releases for disaster relief. Despite this, the state government is increasing its own revenues and allocating funds for development projects.
What if DOGE doesn’t actually save any money?
Despite the Trump administration's claims of significant spending cuts, federal expenditure has been rising since January 2025. The Department of Government Efficiency, led by Elon Musk, faces challenges as expected cuts and layoffs haven't substantially decreased overall spending. Critics question the sustainability and effectiveness of these measures.
While Musk tries to save US govt $1 trillion, China is struggling to spend enough cash
China is grappling with underspending its budget due to local officials' concerns over investment returns amidst efforts to address a sluggish economy. Premier Li Qiang announced measures to empower cities to support the ailing property market, crucial for boosting public-sector income and meeting growth targets. Achieving the 5% growth goal remains uncertain without addressing these spending issues.
A shutdown may be averted, but at what cost?
Republicans approved a stopgap funding bill to avoid a government shutdown and extend spending levels until September 30. Although it provides modest savings, it fails to address the exorbitant spending issue. The bill, needing Senate approval, faces doubts and might not achieve the fiscal responsibility Republicans aim for, risking an increased national debt.
Govt seeks House nod for extra ?51,463 cr spending
The Indian government has sought parliamentary approval for an additional net expenditure of ?51,463 crore for the current fiscal year, on top of a previous approval of ?44,143 crore. Despite this, the fiscal deficit is expected to be contained at 4.8% of GDP due to higher nominal GDP estimates.
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