So there we have it. The Modi government, despite its huffing and puffing for the last five year is as broke as any previous government because it has been consistently falling short of revenue while its expenditure has steadily increased and generously. This gap is called the fiscal deficit.
There used to be a time when – in the world’s economic thinking -- the fiscal deficit hadn’t begun to dominate the policy horizon. Those were also the days when the bond markets hadn’t begun to shape monetary policy. Openness to trade, freely floating exchange rates, inflation targeting, foreign portfolio investment, capital
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