Picture by PTIVoicing concerns over populist measures, the Reserve Bank on Wednesday warned that income support schemes and farm loan waivers will lead to fiscal slippages for the states. In its presentation, the RBI listed out specific factors that would drive fiscal slippages in the revised estimates of 2018-19, including “farm loan waivers and income support schemes”, an official release said. The presentation mentioned that in the past, states’ fiscal position was stretched due to the Uday bonds for the power sector. All RBI governors have been repeatedly flagging its concerns about fiscal slippages, primarily because of its impact on inflation, its core mandate. “Fiscal deficit of states is budgeted to be lower in 2019-20 BE (budget estimates), but RE (revised estimates) and actuals deviate significantly (reflecting poor fiscal marksmanship),” the release said quoting the presentation.

Source: The Telegraph May 08, 2019 19:18 UTC