RBI Report: We all keep track of our expenses and income in our daily lives. Sometimes at the end of the month, we feel we’ve spent too much, and sometimes we feel everything is going smoothly. Similarly, governments of countries also keep track of their expenses and income.
Recently, a report from the Reserve Bank of India has come to light, which has given people something to think about. According to this report, the fiscal deficit of states has now increased to 3.3 percent of their total revenue. At first glance, this figure might seem alarming, but when we understand the real reason behind it, the picture looks a little different.
What is stated in the Report presented by the Reserve Bank of
According to the RBI, in the last few years, the fiscal deficit of the states has been more or less in control. That means they have spent as much as they have earned. Now the situation is a little different. Their expenditure is more than what they have earned. Thus, the figure reflects the fiscal deficit as 3.3 percent.
However, this does not imply that the states are wasting money in vain. Rather, this spending is being made to build upon the future of the country. The work on significant projects concerning roads, bridges, infrastructure, health, education, employment, etc., is in full progress.
Though it has increased, it has a strong reason
What was more important in the whole matter was the fact that the central government was granting the states interest-free loans for 50 years. Here, the attention should be paid to the fact that the states don’t need to worry for long decades about returning the loans to the central government for those development projects.
This money is not spent in earning immediate profits, rather in generating profits in the future. The objective is to enhance the revenues of states, provide employment, and boost the economy in the future.
Is this in fact reason for concern?
Thus, if we look at the figures, we may be concerned about the increase in deficit. But if we look at the reason behind this rise, we will realize that this deficit has nothing to do with negligence, as this has been caused by careful investment.
It has been clearly stated that the economic conditions of the states are currently stable, and if this expenditure is made, we will be able to look at economic development in the future. Thus, this clearly shows that the money spent now will be used in the future.
What will be the impact on the common man?
It means that for an ordinary person, in the coming years, they shall experience an improvement in roads, in transport facilities, in jobs, and in infrastructures. It becomes the duty of the governments to see that this spending does not become imbalanced and that taxes do not escalate in the future.
In overall analysis, the RBI report is not alarming but reassuring. It suggests the country is on the path to development and that a slightly higher level of expenditure is necessary for the same.
Disclaimer: This article is based upon available public domain information and also includes information given in the RBI report. The information given in this article is for understanding purposes only. Before making any financial or economical decisions, it is advised to consult official sources or consider advice from financial experts.
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