MPC expected to retain policy repo rate at 4%: CARE
February 03, 2021
The US Treasury’s sabre rattling should not worry the RBI too much - REUTERS×
The Monetary Policy Committee (MPC) is expected to retain the policy repo rate at 4 per cent owing to the concerns around core inflation, CARE Rating said in a report.
In this regard, the credit rating agency also pointed to the widening fiscal deficit and normalisation of economic activities, which could weigh on the inflation outlook
CARE expects the accommodative monetary policy to continue.
The Reserve Bank of India (RBI) will be announcing the results of voting on the repo rate and monetary policy stance by the six member MPC on February 5, 2021.
Budget 2021: Tax buoyancy projected to be 1.2 in FY22
Tax buoyancy, which describes the sensitiveness of tax revenue growth to changes in nominal GDP, is expected to touch 1.2 in FY22, marginally lower than 1.3 in FY21 (both tax revenues and GDP are projected to decline)
Niti Kiran | February 1, 2021 | Updated 19:40 IST
Central government s gross tax collection missed its FY21 target by almost 22 per cent at Rs 19 lakh crore. More so, it has pegged earnings of Rs 22.2 lakh crore in FY22, much lower compared to the budget estimates of FY20 and FY21 - Rs 24.6 lakh crore and Rs 24.2 lakh crore, respectively. On that account, the collections are expected to move up by 16.7 per cent in the next fiscal (against the revised estimates of FY21). Given the nominal GDP growth of 14.4 projected in the Union Budget of 2020-21, the tax buoyancy will probably stand at 1.3.
January 13, 2021
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Earlier projection was 9-9.5%; after adding borrowings on for GST compensation to states, fiscal deficit seen at 8.4%
CARE Ratings has revised downwards its projection of the Centre’s fiscal deficit to 7.8 per cent of GDP during FY21 against its earlier estimate of 9-9.5 per cent.
This revision comes in the wake of the release of the first advance estimate of gross domestic product (GDP) for FY21 and the credit rating agency’s expectations on the finances of the Central Government.
On adding the amount borrowed for Good and Services Tax (GST) compensation to states, the fiscal deficit could widen to 8.4 per cent of GDP, the agency added.