Facing revenue shortfall, Government might seek another interim dividend from the RBI. 2019 was the worst year on record for auto sales, SIAM says.
The Sequel's Already Here: As the economic slowdown, below-the-mark tax revenue and unmet disinvestment targets bite into state revenues, the government is reportedly considering turning once again to the RBI to seek an interim dividend to prevent the fiscal deficit from going haywire.
The likelihood of this happening again increased after the recent National Statistical Office report that pegged the expected nominal GDP at ?204.6trn ($2.88trn), lower than the ?211trn ($2.97trn). This alone could widen the fiscal deficit to 3.44% of GDP against the 3.34% target.
Not Long Ago: Earlier this fiscal, the Central Bank had transferred ?1.48trn ($20.83bn) - the biggest-ever annual transfer of such a kind. The RBI paid ?28,000cr ($3.9bn) as interim dividend from its 2018-19 fiscal accounts (July-June) in February, which helped the government contain the deficit at 3.4% in the last fiscal. Financial Express
And Way Down We Go: 13.77%. That's how overall wholesale of vehicles plummeted by in 2019.
As per data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday, the automobile industry suffered its worst-ever decline in sales in 2019 (sales data began being recorded in 1997).
All vehicle segments reported de-growth last year as low consumer sentiments, weak rural demand and economic slowdown took toll on demand. Read details here.
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