OPINION, P6 ECONOMY, P2 DEVELOPMENT PUSH If the economy is humming,whydoes it need so much stimulus? High govt borrowings, not all shown in Budget, will raise interest rates EMPLOYEE SURVEY PM lays foundations for infra, healthcare & edu projects in J&K EDITORIAL INTERNATIONAL, P4 Google losing talent advantage as workers doubt Pichai’s vision NEW DELHI, MONDAY, FEBRUARY 4, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 289, 20 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E DEFICIT UNDERSTATED Non-capex EBRs up, raise debt-trap fear PSUs not just a milch cow for Centre... Dividend by CPSEs (`/cr)* Tax on dividend (`/cr) FY17 78,129 FY18 76,578 FY16 68,583 FY15 56,527 15,000 FY14 65,115 Increasing use of off-Budget funds for govt schemes; Interim Budget hikes FCI’s FY19 borrowings by 170% to `1.96 L cr 10,000 13,586 8,709 (`/cr)# FY16 FY17 5,000 0 Buyback by CPSEs FY18 FY14 FY18 18,964 5,340 FY19 ~12,000 # *Over 60% goes to the Centre's kitty 4,483 Buybacks started in FY16 ...they also borrow heavily on its behalf PRASANTA SAHU New Delhi, February 3 IN THE NEWS Voda-Idea says 25% of network integration done VODAFONE IDEA has completed integration of mobile network in 8 telecom circles after the merger, leading to a two-time improvement in 4G services, the company said on Sunday, reports PTI. "Vodafone Idea successfully consolidated 25% of its nationwide radio network in just 5 months," it said. CAUGHTBETWEENTHE twin goalsoftreadingthefiscalconsolidationpathandkeepingits various welfare programmes adequately financed, the Centrehasscaledupthefundingof thesenon-revenue-generating schemes through extra-budgetary resources (EBRs), all off-budget borrowings raised by its surrogates. EBRs of this variety jumped from `77,350 crore in FY17 to a massive `2.24 lakh crore in FY18 and, as per the Interim Budget presented on February 1, to `2.74 lakh crore in FY19. A large part (about threefourthsinFY19)ofsuchoff-balance sheet borrowing by the Centre is meant to fund the yawning gap between the budgetaryallocationsandtheactual resource needs for the National EBR^ by CPSEs# # FY17 2,38,857 (`/cr) (`/cr) FY18 4,41,230 FY19 4,46,025 FY20 3,97,198 (BE) Of which EBRs for govt schemes FCI’s EBR for govt (`/cr) 2,73,881 2,11,018 FY18 2,24,418 1,95,943 FY19 77,364 FY20 1,77,992 FY17 FY18 FY19 (BE) ● `500/MONTH SOP Jaitley hints amount may be increased YOSHITA SINGH New York, February 3 UNION MINISTER Arun Jaitley on Sunday hinted that the `500-a-month cash dole to small farmers may be increased in future as the government’s resources grow, and said states can top up this amount with their own income support schemes. Jaitley, who is in the US for medical treatment, also slammed Congress president Rahul Gandhi for ridiculing the scheme announced in the Interim Budget by equating it to a `17-a-day dole. Continued on Page 2 TELECOM TROUBLE Revenue targets missed; no hope of cut in levies KIRAN RATHEE New Delhi, February 3 ANYHOPESTHATthetelecom industry had of reduction in levies such as licence fee, spectrum usage charges or some form of further moratorium on the payment of deferred spectrum charges seem dashed now. Going by the Interim Budget,it is quite clear that the department of telecommunications (DoT) is not going to bring about any reduction in levies as promised in the new telecom policydocument. The numbers on telecom earnings show that with FY19 Budget target `48,661 cr What the govt will finally get `39,245 cr Shortfall `9,416 cr Budget target for FY20 `41,519 cr declining tariffs in the industry, the sector’s revenues are falling and with that the gov- ernment’s revenue as well. As a result, there’s hardly any room for the government to reduce levies. Revenues through telecom earnings,whichincludelicence fee, SUC and instalments of deferred spectrum payment, will fetch the government `39,245 crore in FY19 against the targeted `48,661.41 crore. Thismeanstherewillbeashortfall of `9,416.42 crore. The Budget estimates for FY20 have been fixed at `41,519.76 crore — a negligible growth over the final estimates of FY19. Continued on Page 2 ^Including those by railways, NHAI and FCI Research by FE BUREAU Growth paradox Food Security Act (NFSA) over the years, but the funds raised also are used for various other schemessuchasSwachhBharat, rural electrification,affordable housing and higher-education infrastructure,etc. Such EBRs — distinct from loans raised by assorted CPSEs and other government undertakings for their capex programmes most of which could be financed out of these entities’ receipts — have a virtual lien on the exchequer, but these are being kept out of the Budget and excluded from the fiscal deficit reported — the excuse being these are largely future, rather than current liabilities. While the Comptroller and Auditor General of India (CAG) has questioned this practice, many independent agenciessuchasJPMorganand Credit Suisse have also raised alarm over the resultant under-statement of the Centre’s fiscal deficit in reports releasedsincethepresentation of the Interim Budget. Continued on Page 2 SPECIAL FEATURE A remarkably efficient economy? The NDA has presided over much lower non-food credit growth and investment rates than the previous two regimes, yet has thrown up higher GDP growth rates. Only an incredible jump in the economy's productivity would have made this possible. How they stack up (Average annual growth, %) 16.7 9.9 Non-food credit *Gross fixed capital formation UPA-I UPA-II NDA (FY05-09) 27.9 (FY10-14) (FY15-18) 13.8 7.5 6.7 Investment* 7.7 5.4 6.7 GDP Source: RBI, MoSPI Game of hashtags It is the go-to strategy for brands to capture consumers’ attention on social media. But does it work? ■ Brandwagon, P10
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