P Chidambaram eyes $15 bn rollover of subsidy costs into next budget

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P Chidambaram had said earlier this month that the jump in subsidy spending must be tackled sooner rather than later to help stabilise the economy. P Chidambaram had said earlier this month that the jump in subsidy spending must be tackled sooner rather than later to help stabilise the economy.
SummaryChidambaram insists that fiscal deficit target of 4.8% of GDP is a red line that will not be breached.

a rebound to around 6.5 percent.

Ministry officials say the rollover is the result of India's cash-basis accounting, in which income is recorded when cash is received and expenses are recorded when cash is paid out. Many advanced economies follow accrual accounting, in which income and expenses are recorded as they occur regardless of whether cash has actually changed hands.

India's accounting method "never gives you the real picture of your finances," said Devendra Kumar Pant, chief economist at India Ratings & Research. "You start the year on the back foot as you have so much backlog to clear."

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