Letters: Fiscal fix

Apropos T N Ninan’s column “The price of inclusion” (Weekend ruminations, November 19), the author’s prognosis deserves to be read by policy-makers in New Delhi. Three factors – food inflation, trade deficit and fiscal deficit – have ruined the Indian economy. And the UPA-II and its populist policies have contributed much to the current fiscal math. The goal of budget deficit of no more than three per cent of the GDP remains distant. One wonders what happened to the much-publicised Fiscal Responsibility and Management Act (FRBMA). Also, experts in the government have not been able to make any credible economic forecast about any of the three macro-economic factors mentioned by Ninan. Indeed the bloated state machine needs fixing, but unfortunately it is only getting bulgier by the day. Bolder and tougher reforms are in order, but there are no immediate signs. In such a scenario, the government’s ability to manage its finances should be watched carefully over the next few months.

 

K V Rao, Bangalore

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