1966 or 1991? Two lessons from history for FM Sitharaman before Budget

The 1991 budget freed businesses from random, illogical productive controls. Exactly opposite of what happened in 1966.

T C A Srinivasa-Raghavan
Nirmala Sitharaman

Finance Minister Nirmala Sitharaman presents the Union Budget on February 1.

In seven days from now India’s first woman finance minister will present her second budget. She does so from a position of extraordinary fiscal weakness. There have been two previous years when the government found itself in such dire straits. 
The first was in 1966 when three wars in the three previous years, and a massive drought in 1965, had laid India as fiscally low as it is now. 
The second was in 1991 when a major balance of payments caused by a massive fiscal deficit had knocked the bottom out of the budget. 
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Jan 25 2020 | 9:27 AM IST

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