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Missing fiscal deficit target is in Budget DNA

The government of the day won't be able to resist the temptation to err on the side of expansion and leave it to its successors to pay for its excesses

T T Ram Mohan 

T T Ram Mohan

Now that the din over the Union Budget has died down, it’s worth asking: Does the fiscal deficit target of 3 per cent of gross domestic product (GDP) make any sense at all? The finance minister told us in her Budget speech that we will miss the targets for 2019-20 and 2020-21 by 0.5 per cent. Nirmala Sitharaman sounded prim and proper on the subject.

The deviations, she said, were in accordance with the “trigger mechanism” provided by section 4(2) in the Fiscal Responsibility and Budget Management (FRBM) Act. The section allows the government to deviate from the ...

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First Published: Wed, February 12 2020. 22:18 IST
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