STOCK MARKET BSE NSE

Telangana sees steep fall in headline inflation

Ideally, policymakers and governments favour high growth and low deficits, but worryingly, TS figures among the high growth and high deficit states.

Published: 22nd January 2019 07:38 AM  |   Last Updated: 22nd January 2019 07:38 AM   |  A+A-

Express News Service

HYDERABAD:  Telangana was one of the three states that saw the sharpest fall in headline inflation in FY18. Prices fell from an alarming 12 per cent in FY13 to 3.9 per cent in FY18, according to Crisil Ratings’ report on ‘States of Growth 2.0.’Ideally, policymakers and governments favour high growth and low deficits, but worryingly, TS figures among the high growth and high deficit states Though average inflation fell across states, volatility rose, partly led by a spike in food inflation.

While the State’s economic heartbeat, aka Gross State Domestic Product (at GSDP), at 10.4 per cent in FY18 grew well above the national average of 6.7 per cent, TS’ fiscal deficit needs its pulse checked. It was one of the ten States, whose deficits overshot the FRBM limit in FY18, but the good news is, at 3.2 per cent of GSDP, TS’ breach in fiscal deficit target is not only polite (compared to Bihar or Punjab’s 7.2 and 4.5 per cent respectively), but also stands at a kissing distance from the FRBM’s 3 pc target. 

TS figures among high growth, high deficit States

The State’s five-year average (FY13-FY17) deficit at 3.5 per cent is also higher than better-disciplined states like Karnataka or Gujarat, but perhaps Chief Minister K Chandrasekhar Rao is taking comfort in the debt-fuelled growth strategy led by US and Japan, as against Keynesian counter-cyclical fiscal policies, where deficits decline in a growing economy.

Ideally, policymakers and governments favour high growth and low deficits, but worryingly, TS figures among the high growth and high deficit states, unlike Maharashtra and Karnataka, which have high growth, but low fiscal deficits. The upshot, though, is the State is among the top five states that spend more on capital expenditure (capex), which includes money spent on creating assets like building roads, dams, power plants, setting up hospitals and schools.

Over the last three years, out of every Rs 100 spent, about Rs 22.5, or nearly a quarter, was towards capex, with a remarkable sum going into irrigation projects. TS ranks among the States that has higher per capita income than the national average. 



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp