RBI Financial Stability Report 2022: The Reserve Bank of India (RBI) has expressed concern in its report regarding the rising subsidy bill of the states. The bank says that if the subsidy is still not curbed, then the wheels of development can stop in the country. RBI has published its Financial Stability Report in December 2022. In this, the bank said that if the subsidy bill of the states continues to increase in the future, then they will not have money left for development.
View State Expenditure on Subsidy
According to media reports, the expenditure of states on subsidies increased by 12.9 percent in the financial year 2021 and 11.2 percent in 2022. There was a decline in the financial year 2020. In this report, it was said that in 2019-20, the share of subsidy in the total revenue expenditure of the states was 7.8 percent, which has increased to 8.2 percent in 2021-22.
Free facility is being given to people
RBI said in its report that there has been a huge increase in subsidy in many states. it concerns. Even in the report of the 15th Finance Commission, some states have expressed concern over the increase in the share of subsidy in the revenue expenditure. In many states people are being given free electricity and water. Similarly, ration is being distributed in some states at a nominal cost.
These states will create economic crisis
According to a report by India Ratings this year, 5 states including Punjab may be caught in serious economic crisis. The share of subsidy of these states has increased considerably. Apart from Punjab, these include Chhattisgarh, Rajasthan, Karnataka and Bihar.
cause of rising inflation
According to the RBI Financial Stability Report 2022, the Indian economy is facing adverse global conditions. The financial system is in a sound state due to strong economic fundamentals and a healthy balance sheet of both the financial and non-financial sectors. However, inflation remains high. But now there has been a softening due to rapid monetary policy steps and intervention at the supply level. RBI said that inflation also increases due to the strong US dollar making imports costlier. This especially increases the prices of those commodities, which are imported in dollars.
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