India's fiscal deficit Ministers, politicians, Government singing Jai HO, shame and discrace on theses tainted corrupt Govt officials, we Voted for the UPA govt this is what citizens and country get in return.demoratic country turned into a banana republic, Sonia should be deported to Italy. Mr Clean Manhoman Singh has no ( guess what ) a puppet in the UPA Govt.we need Pipe piper to weed out theses rats ( pests) and throw them in the sea
That is absolutely fair and will bring down the state deficits. Centre sucks in tax money from states, but a lot of politics goes into how that money is utilised and to which states. Till now, Centre has the policy of rewarding non-performing states more, so the incentive of maintaining fiscal deficit is not there.
American economy is the biggest economy in the world since 1940s (correct me if I am wrong). Now this economy has always been in deficit. So does this mean that deficit is good or bad. I think it's being nither, it's just being smarter. Of course, the reason for Maharashtra being in deficit are very different, primary reason in this case being corruption and money laundering.
Re: Economy
by Mathew Mathews on Dec 11, 2010 02:23 AM
All the deficits that has accumulated over a period of time in US is what is going to be biggest problem to hit US economy next.
Re: Economy
by Maximus Meridius on Dec 11, 2010 06:36 AM
Deficit is not the problem. It is the Debt to GDP ratio that is important. The US has been continually growing as an economy and hence their ratio has been favourable. Also add in the fact that the US has never defaulted on its debt for close to a century makes it a credible lender, and this is reflected in the low yields on US treasury bonds (2.4 percent or so). India, on the other hand is a historic defaulter (multiple times from 1960 to 1990, the last one causing a bailout from the IMF/world bank in return for economic liberalization). Consequently, India has to pay over 9 percent on its treasuries. In India, the high deficit is causing high inflation; in the US, inflation is low. High inflation (direct result of deficits) additionally cause the value of the rupee-denominated bond to reduce over time; hence even higher interest rates to compensate. Bottom line: the US has still a lot of margin for error on deficits, in part because it is the reserve currency of the world, and everyone buys USDs, pushing its prices up and lowering its yield (even now, despite the meltdown, this is true). India does not have that luxury... it takes decades to wipe the black mark of default and bailouts from your history. India has to cut deficit by cutting the size of the bureaucracy. Unfortunately, no government has the guts to do that, unless another crisis comes (much like the one that caused economic liberalization).That said, if INdian GDP grows faster than the deficit, it's all OK.
According to one of Swiss Bank directors: *Rs.280 lac crore black money is in Swiss Banks. *it can be used for taxless budget for 30 years *can give 60 crore jobs(to all indians) *from any village to delhi 4-lane roads forever free power supply to more than 500 social projects *every citizen can get monthly Rs.2000 pension for 60 years *no need of World Bank & IMF loans So,fight corruption and rich politicians...
My prediction is 10 years down the line if centre won't oppose to set up big plants as per the signed MOU, then Odisha is the place to enrich it's richness. My money is on Odisha, with a clean state govt. and mineral rich state should not lagging behind others. Hope for the best, I have already invested money on it. Jai Utkal.. Jai Kalinga.. Jai Hindustan
