Economy Updates - Fiscal deficit at 7.8 pc of GDP

Indian Economy Updates - Including bonds issued to oil and fertiliser companies, the government's fiscal deficit for the year to March is estimated at 4.22 trillion rupees ($84 billion), the minister of state for finance said on Thursday. That equates to a total federal fiscal gap of 7.8 percent of gross domestic product.

Last week, the finance minister said in the budget speech the federal fiscal deficit would rise to 3.27 trillion rupees, or 6 percent of GDP, this financial year, but that did not include the off-balance sheet oil and fertiliser bonds.

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In a written reply to parliament, Pawan Kumar Bansal said a rise in global oil and food prices had lifted the government's subsidy bill, while stimulus packages to shield the economy from the global slump had raised expenditure.

"The fiscal deficit including the liability on account of securities issued during the year to oil marketing companies and fertiliser companies is (4.22 trillion) rupees," he said.

On Tuesday, Standard & Poor's cut its outlook on the country's long-term sovereign credit rating to negative from stable projecting the country's deficit, including off-budget items such as oil and fertiliser bonds, to increase to 11.4 percent in 2008/09, up from 5.7 percent in the previous year.

posted under - fiscal deficit, indian economy blog, economy of india, fiscal deficit updates, indian economy, economy of india, economic recession updates

Does US institutions really want to get out of crises

Well the world has been talking about the ongoing economic recession from september 2008 onwards probably this economic crises has been the longest running headlines i have ever seen, it's already into sixth month since it's inception. and still the markets are not responding in the positive manner and would not do so for atleast another 3-6 months according to me. US government and all the governments of the countries which have been swept by the tide of recession are pushing a lot of capital into the market so that the stagnant economy starts to move in the cycle again.

But still it seems like a distant island which the world economy is searching for right now. Government bailouts is certainly not doing the work neither are the job cuts or other cost cutting measures being taken. Already more then US$500 billion have been pushed into the economy by the US government. However indian economy would be less affected by this turmoil since 2/3rd of the industrial output of indian industries is consumed internally and only 1/3 rd of the output is exported to outer world , However the sectors which are directly depending on the other foreign companies like our very own outsourcing industry is feeling the heat with cost cutting measures and pink slips all around.

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All the governments are trying their level best by infusing more money into economy, still the danger of deflation is haunting business houses and industries as consumer confidence hits all time low in 50 years. Adding to the problem further is that whether US institutions which are getting grants from government in billions themselves want to put an end to ongoing crises ? the answer to this question after looking to latest company updates is a big NO, Citigroup ordered a corporate jet worth US $ 44 million whose delivery is ready(We do remember that Citi group is getting aid from US government and is already undergoing some major restructuring of the organization), Merill lynch has disbursed US$ 4 billion as bonuses to it's top brass(It was too in ailing condition and BOA had to do a takeover of Merill Lynch to help it and from last two quarters Merill Lynch has posted heavy lossess) so what are these bonuses for??

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US newly appointed president BaracK Obama came to know about these two incidents and has slapped both the institutions with overspending amid bad times and when your President slaps you there is no other option then taking back the moves which have been termed as overspending and not using govt funds for coming out of the bad times. So Citigroup has finally cancelled the order of $44 million corporate jet.

Adding further trouble is that European economies have slipped into condition which is even worse then the US. Governments have started showing bankruptcies, recently i read that government of Iceland has stated that the country iceland is into bankruptcy huhh!!

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-Plan for World Economy Revival
-World's Strongest economies list
-US Economic recession-how it started

And according to me european economies would take even more time then US to come out of the economic depression which has now become biggest since the great 1929 depression which we read in our history books.

posted under - economic crises, US companies, govt bailouts, US economy crises, economy of USA, world economy updates, indian economic advantage