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

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Need for a New Medium-Term Fiscal Strategy

Policymakers must see that there is an inconsistency between the new emphasis on inclusive growth and the rigid fiscal strategy they want to follow. Fiscal prudence should not be discarded but the conentional focus on a narrow interpretation of fiscal and revenue deficits harms the cause of balanced growth. There is also a need to reorient government expenditure and to mobilise resources by ending and even rolling back the increasing regressivity in direct taxation. We need, in other words, a new fiscal strategy for the medium term.

of GDP) and signicantly, the bulk of this rise in the scal decit about Rs 1,05,613 crore out of Rs 1,93,228 crore was on a ccount of these uncovered expenditures. The stimulus packages, on the other hand, added up to a meagre amount of Rs 40,000 crore or thereabouts.

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