ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A More Relaxed View of Fiscal Consolidation

The finance minister has sought to convey, however subtly, that we can live with the present level of the fiscal deficit without getting killed, meaning, we can still achieve a growth rate of around 6 per cent. If he does deliver growth in the coming year, economic agents will come to believe that he is right, India�s present fiscal deficit level will lose some of its terror and the economy could conceivably move to a virtuous spiral of higher growth and a lower debt to GDP ratio. In the process, Singh may well end up effecting a paradigm shift of sorts in fiscal policy.

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