UPA Govt = Deficit jump?

The nation is not just suffering food inflation it is facing a doubling of  in  fiscal deficit yet again. It would be very difficult for the govt to cook its books this time around with creative accounting as the fisc deficit has gone up 93%and the revenue deficit111 %.If the Disinvestment program does not start soon the govt will be in a bit of a jam as most rating agency s will most certainly downgrade our ratings which stand at  BBB- (S&P) to junk status.

Here are some figures as per TOI. Net net looks like the days of high inflation, high deficits and high growth numbers (gross) are going to continue.

Not only that , there is more cooking of books to benefit cronies and vested interests as many PSU banks are cleaning up their books using One time settlement or OSTs.

According to government data, in 2007, against a recovery of Rs 9,200 crore, these PSBs had written off more than Rs 9,400 crore. The story was repeated in 2008 when against a recovery of Rs 9,300 crore these banks had written off Rs 8,000 crore. The net recovery in 2009 was about Rs 11,000 crore while write-offs exceeded Rs 7,400 crore.
The government’s claim that it has managed to bring down NPAs from 18% in 1997 to 2% at the end of March 2009 sounds hollow and highlights an alarming trend of “cooking” books to present a healthy status. Though in the previous year, a portion of write-offs also included agricultural loans, the net NPAs of these PSBs at Rs 44,000 crore at the end of last fiscal against an outstanding of Rs 21 lakh crore is likely to see a surge given these banks exposure to commercial real estate.

Total outstanding credit to the commercial real estate of Indian banks, both government-owned and private, at the end of March 2009 was Rs 91,500 crore as against Rs 63,000 crore till March 2008. …(TOI)

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4 thoughts on “UPA Govt = Deficit jump?

    1. Very true ,
      u still have a finger on the pulse
      one more thing people also have short term memories and the intelligent ones have really given up on politicians

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