Fiscal policy reset

Faster consolidation will require expenditure adjustments

The upcoming interim Budget will be the last fiscal policy exercise of the second Narendra Modi government. It would also mark the end of what has perhaps been the most difficult five-year term for fiscal management in recent memory. Although government finances are still recovering from the shock induced by the Covid-19 pandemic, the policy establishment, particularly the Ministry of Finance led by Union Finance Minister Nirmala Sitharaman, must be commended for its adept handling of the situation. Managing government finances during the pandemic period was extremely difficult. There was no playbook available for reference. The experience of the global