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Parthasarathi Shome: The evolving fiscal stance

Fiscal consolidation based on curbing expenditure is a sensible move, but direct tax collection efforts also need to be strengthened

The 2010-11 Economic Survey and 2011-12 Union Budget have come and gone. The immediate reactions sought by media have dissipated. Now is the moment to deconstruct and thus view the overall fiscal stance that is emerging over the last few years through, and post, global financial crisis. First, India’s fiscal developments reveal a relaxation in tax and expenditure efforts during the crisis followed by relative tightening after the crisis from 2010-11. Thus, consolidation is taking place during the current up-cycle. Overall, therefore, the stance has been counter-cyclical as it should ...