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PUBLIC DEBT IN INDIA

PUBLIC DEBT IN INDIA. JAYANT SINHA & AM BAJAJ SAI INDIA. STRUCTURE OF PRESENTATTION. SAIs APPROCH TO PUBLIC DEBT PUBLIC DEBT OF CENTRAL GOVERNMENT FISCAL RESPONSIBILITY LEGISLATION. DEBT & CONSTITUTIONAL PROVISIONS. NO CONSTITUTIONAL LIMIT TO BORROWINGS BY CENTRAL GOVT.

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PUBLIC DEBT IN INDIA

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  1. PUBLIC DEBT IN INDIA JAYANT SINHA & AM BAJAJ SAI INDIA

  2. STRUCTURE OF PRESENTATTION • SAIs APPROCH TO PUBLIC DEBT • PUBLIC DEBT OF CENTRAL GOVERNMENT • FISCAL RESPONSIBILITY LEGISLATION

  3. DEBT & CONSTITUTIONAL PROVISIONS • NO CONSTITUTIONAL LIMIT TO BORROWINGS BY CENTRAL GOVT. • STATE MAY NOT WITHOUT THE CONSENT OF THE GOVT OF INDIA RAISE ANY LOAN IF THERE IS STILL OUTSTANDING LOAN WHICH IS OF THE STATE WITH THE GOVT OF INDIA.

  4. SAI INDIA & ITS ROLE • INDIA HAS A FEDERAL CONSTITUTION- WITH A CENTRAL GOVERNMENT & 28 STATES. • EXTERNAL AUDIT FOLLOWS A UNITARY STRUCTURE- THE CAG, IS THE CAG OF INDIA- OF BOTH THE CENTRAL GOVT. & OF THE STATES. • REPORTS OF THE CAG ARE THEREFORE TABLED IN PARLIAMENT & THE STATE LEGISLATURES SEPARATELY FOR THE CENTRAL GOVT. & STATE GOVTS.

  5. SAI INDIA-APPROCH TO PUBLIC DEBT • AUDITED SEPARATELY FOR THE CENTRAL GOVT. & STATE GOVTS. • COMMENTS, ANNUALLY, ON LEVEL & COMPOSITION OF PUBLIC DEBT IN REPORT ON ACCOUNTS OF THE GOVT. OF INDIA. • A SEPARTE AUDIT REPORT ON PUBLIC DEBT OF GOVT. OF INDIA WAS PREPARED BY SAI INDIA IN 1994. • COMMENTS, ANNUALLY, ON LEVEL & COMPOSITION OF PUBLIC DEBT ALSO FIND MENTION IN AUDIT REPORTS OF STATE GOVERNMENT WHICH ARE PLACED IN THEIR LEGISLATURE.

  6. AUDIT COMMENTS ON DEBT • AUDIT COMMENTS HAVE BEEN MADE ON • DEBT SUSTAINABILITY • DEBT STABILIZATION • LEVEL OF NON DEBT RECEIPTS • NET AVAILABILITY OF BORROWED FUNDS • BURDEN OF INTEREST PAYMENT • MATURITY PROFILE OF GOVT. SECURITIES

  7. AUDIT COMMENTS ON DEBT • PERSISTENCE OF PRIMARY AND REVENUE DEFICITS OVER THE YEARS WHICH WOULD LEAD TO AN ACCUMULATION OF GOVERNMENT DEBT. • IMPORTANCE OF EXERCISING SOUND EXPENDITURE CONTROL MEASURES.

  8. PUBLIC DEBT OF CENTRAL GOVERNMENT • MACROECONMIC POSITION OF THE GOVT. OF INDIA HAS BEEN FAVOURABLE IN THE RECENT PAST. • GDP GROWTH HAS BEEN CONSISTENTLY HIGHER THAN GROWTH OF LIABILITIES OF GOVT. OF INDIA IN THE RECENT PAST. • SINCE 2005-06 DEBT(LIABILITIES) TO GDP HAS WITNESSED A STEADY DECLINE.

  9. FISCAL RESPONSIBILITY LEGISLATION • GOVT. OF INDIA ENACTED IN 2003 THE FISCAL RESPONSIBILITY LEGISLATION. IN 2004 RULES IN THIS REGARD WERE FRAMED. • THESE ENVISAGE GREATER FISCAL TRANSPARENCY. • CENTRAL BANK TO ONLY PROVIDE BORROWING ACCOMMODATION TO THE CENTRAL GOVERNMENT TO MEET TEMPORARY CASH MISMATCHES ONLY. • RESTRICTIONS PLACED ON ASSUMING ADDITIONAL LIABILITIES.

  10. FISCAL RESPONSIBILITY LEGISLATION • IN 2012 THE CENTRAL GOVT. AMENDED THE FISCAL RESPONSIBILITY LEGISLATION BY WHICH SAI INDIA IS TO REVIEW PERIODICALLY THE COMPLIANCE TO THE LEGISLATION. • SUCH A REPORT BY SAI INDIA IS TO BE TABLED IN PARLIAMENT. • THIS ENTAILS A NEW SET OF RESPONSIBILITY BEING CAST ON SAI INDIA. • EXPERIENCE OF OTHER SAIs INVOLVED IN VALIDATING FISCAL RESPONSIBILITY LEGISLATION WOULD BE IMMENSELY VALUABLE.

  11. THANK YOU

  12. Trend of Growth of National Income and Liabilities

  13. GOVT. OF INDIA- DEBT TO GDP RATIOS

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