Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
30 January, 2015 11:51 IST
Govt may target lower subsidy of 2.3% of GDP in FY14: Morgan Stanley
Source: IRIS | 22 Feb, 2013, 11.04AM
Comments  |  Post Comment

The bigger contributor to reduction in projected deficit will be a cut in the ratio of government expenditure to GDP.
   
"Subsidy allocation accounts for another 15-16% of total expenditure. It provides scope for reduction, yet we believe that the non-interest non-subsidy component (which accounts for 62-65% of total expenditure) is where the government can reduce its spending growth," said Morgan Stanley.
 
Total subsidy spending provided in the budget has risen steadily from 1.3% of GDP in F2006 to 2.5% in F2013. "If we include the off-budget burden, then the total has increased from 1.5% in F2006 to 2.8% in F2013 (though off the peak of 3.9% in F2009)," it said.

''We believe that given the recent announcements on fuel price deregulation and potential announcement of a new food subsidy program, the government would target a lower subsidy allocation of 2.3% of GDP in F2014, vs. our estimate of 2.8% of GDP in F2013,'' it added.

It further believes that higher spending growth will most likely take place in the second half of the fiscal year assuming the trend in tax revenue growth is supportive.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
HCL Technologies board approves 1:1 bonus issue - 30-Jan-2015 10:25
HCL Tech Q2 profit climbs 28%; up 2.3% sequentially - 30-Jan-2015 10:10
HDFC Sec upgrades Pidilite Industries to 'Buy' - 29-Jan-2015 18:30
FIIs can invest up to 100% in Veritas: RBI - 29-Jan-2015 18:20
Trent standalone quarterly net drops 31.75% - 29-Jan-2015 18:13
Oudh Sugar Mills loss narrows in Oct-Dec quarter - 29-Jan-2015 18:07
Grindwell Norton consolidated quarterly net up 35.11% - 29-Jan-2015 17:58
Kotak Mahindra Bank to invest 19.9% in Airtel M Commerce Services - 29-Jan-2015 17:56
Kotak Mahindra Bank to invest 19.9% in Airtel M Commerce Services - 29-Jan-2015 17:56
Essel Propack consolidated quarterly earnings climb 7.38% - 29-Jan-2015 17:51
Shriram City Union Finance standalone quarterly earnings rise 10.73% - 29-Jan-2015 17:47
more...
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer