Economy
States’ finances deteriorating, says SBI report
Out of the major 17 non-special category states in India, there were only eight states that satisfied the necessary conditions (NC) and at least one of the sufficient conditions (SC), to become eligible for additional borrowing in FY17-18. However, even these states may find it difficult to mobilise resources due to deteriorating finances, says a research report.
 
In the note, State Bank of India (SBI) says, "...the worrying thing is that even states that are eligible for additional borrowing in current fiscal have recently witnessed deterioration in fiscal deficit. This indicates there is pressure on even the well-off states for mobilising resources. Hopefully, the introduction of goods and services tax (GST) could provide a fiscal buoyancy to states."
 
 
"States who have recently waived farm loan will find it difficult to raise funds without market borrowing in financing additional burden”, the report says, adding, "In this context, we estimate that while Karnataka have the luxury of mobilizing the entire debt waiver amount through market borrowings or non-tax revenue, Maharashtra is also well placed as it can even mobilise Rs11,000 crore from non-tax revenues, and the remaining Rs19,000 crore from borrowings."
 
Market borrowing being the major instrument of financing budgetary deficit, states that have recently waived farm loan will find it difficult to raise funds without market borrowing.
 
As per the Fourteenth Finance Commission Recommendations, all states are required to maintain fiscal deficit of 3% of their gross state domestic product (GSDP) annually for the period 2015-16 to 2019-20. Additional relaxation will be given for market borrowing only to those states that are compliant with both necessary and sufficient criteria of fiscal prudence prescribed by the Commission.
 
The Necessary Condition (NC) is that the States should have zero revenue deficit in the year for which the borrowing limit has to be fixed and in the immediate preceding year. The Sufficient Condition (SC) is that the States’ debt-GSDP ratio should be less than or equal to 25% in the preceding year and interest payment and revenue receipts (IP/RR) should be less than or equal to 10% in the preceding year. States meeting one or both of the above criteria are allowed a relaxation in their fiscal deficit targets by 0.25% or 0.50% of GSDP, provided they meet the Necessary Condition.
 
Additionally, if a State is not able to fully utilise its sanctioned borrowing limit of 3% of GSDP in any particular year during the first four years of award period (2015-19), it will have the option of availing the un-utilised borrowing amount only in the following year but within the award period.
 
Out of the eight states that satisfy the NC and at least one SC, seven states -- Bihar, Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Odisha, and Telangana – have satisfied both the SCs along with NC and are eligible to have a maximum gross fiscal deļ¬cit (GFD)/GSDP ratio of 3.50% while Gujarat is the only state to satisfy one of the SCs, becoming eligible to have a maximum GFD/GSDP ratio of 3.25% in 2017-18.
 
 
SBI says that if last year's Budgetary Estimate (BE) and their Revised Estimate (RE) of fiscal deficit are compared, eight states have revised their target upwards. This year, servicing of UDAY bonds, farm loan waiver and implementation of Seventh Pay recommendation will put additional pressure on the fiscal position of states, making it difficult to achieve their budgetary target, SBI concluded.

 

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COMMENTS

SuchindranathAiyerS

1 week ago

This despite cheating us in every possible way. From inlfated electiricty bills, making us pay for garbage and sewage and then employ private contractors to do work that we paid Government for, having to pay hospitals and schools for poor quality substitutes for services that were free and superb until 1947 and so on. This, and inflation is due to Government profligacy , reservations and extortion-corruption.Sack 75% of Government pay roll and make the rest walk to and from their offices and work for a living. Lynch them if they do not.

As for State Bank, their finances are no better, and all the unconscionable charges that they are hitting innocent citizens with to feed themselves and the their Neta-Babu overlords will vanish like the States' taxes. In smoke.

US newspapers plan to strike Google, Facebook over ad revenue
With Facebook and Google grabbing vast majority of the digital ad market, many newspapers in the US are planning to strike at the tech giants to get an antitrust exemption from Congress to negotiate collectively over advertising revenue.
 
According to a report in Washington Times on Monday, the News Media Alliance, that represents roughly 2,000 US' national and local newspapers including The New York Times, The Wall Street Journal and The Washington Post, has started reaching out to Capitol Hill to sound out the chances for an exemption.
 
"We're not looking to break up Google and Facebook by saying they have a duopoly here, what we are saying is there has got to be a way to improve the business model," Paul Boyle, Senior Vice President (Public Policy) News Media Alliance was quoted as saying.
 
According to Boyle, newspapers had thought allowing their articles to be shared on social media would earn them a piece of the digital ad market.
 
"But Facebook doesn't always allow the reader to click through to the publisher's website, denying the news website ad revenue from that reader," he stated.
 
Facebook, however, said the company is committed to helping quality journalism thrive on its platform. 
 
"We have already been working with publishers and we're making progress through our work and have more work to do," the report quoted Campbell Brown, Head of News Partnerships at Facebook, as saying.
 
According to media reports, Google and Facebook control nearly two-thirds of the digital advertising industry, and newspaper revenue from advertisements declined to $16 billion in 2016, down from about $50 billion 10 years earlier.
 
"Google and Facebook dominate web traffic and online ad income. Together, they account for more than 70 per cent of the $73 billion spent each year on digital advertising, and they eat up most of the growth," David Chavern, President of News Media Alliance, was quoted as saying. 
 
"Nearly 80 per cent of all online referral traffic comes from Google and Facebook. This is an immensely profitable business," Chavern said.
 
Reacting to the News Media Alliance's latest move, Google said it wanted to help news publishers succeed and lately, it had built numerous specialised products and technologies, developed specifically to help distribute, fund, and support newspapers.
 
"This is a priority and we remain deeply committed to helping publishers with both their challenges, and their opportunities," Google was quoted as saying in a press statement.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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SC stays rules banning sale of cattle for slaughter
The Supreme Court on Tuesday extended across the country the Madras High Court order putting on hold the Centre's notification banning the sale and purchase of cattle for slaughter from the cattle market.
 
As a bench of Chief Justice Jagdish Singh Khehar and Justice D.Y. Chandrachud extended the operation of the Madras High Court order, the Centre told the court that it would be renotifying the Rules after considering objections from the stakeholders.
 
Meat sellers have complained of the adverse impact on their trade. 
 
The Centre had on May 25 brought a notification by which sale and purchase of cattle in the cattle market for slaughter was banned. Several states refused to implement it.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Leslie Menezes

1 week ago

This is a retrogade order. There is enough evidence to prove that meat of large bovine animals is unhealthy. The environmental effects are also well documented. Cattle trade is controlled by few Aggarwals and Sibals who are the beneficiaries of this order.

Deepak Narain

2 weeks ago

Animals are also sentient beings and experience pleasure and pain. When we cannot give life, we should not take it either. In a country where vegetarian food is plentiful, killing of animals for it unforgivable. Treatment of animals and slaughter practices also inflict avoidable pains to the hapless animals. Those indulge in it commit crimes against God and will have to pay for it equally painfully.

O S

2 weeks ago

A very bad precedent.

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