The Reserve Bank of India yesterday said that farm loan waivers and income support schemes are increasing risks to fiscal consolidation of the states. The remarks were made during a meeting between the members of the 15th Finance Commission and the RBI senior officials, including governor Shaktikanta Das and the deputy governors, at the central bank headquarters in Mumbai.
A statement from the RBI said that the central bank, in its presentation, listed out the specific factors that will drive fiscal slippages in the revised estimates of FY19, including “the Uday scheme in the past and farm loan waivers and income support schemes in the FY19 revised estimates”.
Terming it as “poor fiscal marksmanship”, the RBI also expressed its concerns on deviation in revised estimates, stating that the budget estimates presented during the beginning of FY20 had indicated a lower fiscal deficit.