Populism all the way and not a trace of prudence
At the end of its five year tenure, the BJP-led NDA government has pressed the 'populism' button, to remove any negativity the small and marginal farmers or the middle class have had from the government.
- Feb 1, 2019,
- Updated Feb 1, 2019 7:59 PM IST
At the end of its five year tenure, the BJP-led NDA government has pressed the 'populism' button, to remove any negativity the small and marginal farmers or the middle class have had from the government. The two big measures -- 'The PM Kisan Yojna' and the tax rebate for the middle class -- will certainly constraint the budget and move resources away from the productive investments.
The government has already missed the fiscal deficit target of 3.3 per cent in 2018-19. The fiscal deficit has slipped to 3.4 per cent. This is not about missing 2018-19 target, but about the fiscal consolidation in the last 5 years. This government started with a fiscal deficit of 4 per cent plus in the 2014 year. The fiscal deficit touched a high of 5.8 per cent in 2011-12 because of the fiscal stimulus post the global financial meltdown. The fiscal deficit figure was 4.1 per cent in 2014-15, 3.9 per cent in 2015-16, 3.5 per cent in 2016-17, 3.2 per cent in 2017-18 and 3.4 per cent in 2018-19. A sustained higher fiscal deficit gradually creates more inflationary pressure in the economy. India already has higher interest rates, which impacts the competitiveness of the industry.
At the end of its five year tenure, the BJP-led NDA government has pressed the 'populism' button, to remove any negativity the small and marginal farmers or the middle class have had from the government. The two big measures -- 'The PM Kisan Yojna' and the tax rebate for the middle class -- will certainly constraint the budget and move resources away from the productive investments.
The government has already missed the fiscal deficit target of 3.3 per cent in 2018-19. The fiscal deficit has slipped to 3.4 per cent. This is not about missing 2018-19 target, but about the fiscal consolidation in the last 5 years. This government started with a fiscal deficit of 4 per cent plus in the 2014 year. The fiscal deficit touched a high of 5.8 per cent in 2011-12 because of the fiscal stimulus post the global financial meltdown. The fiscal deficit figure was 4.1 per cent in 2014-15, 3.9 per cent in 2015-16, 3.5 per cent in 2016-17, 3.2 per cent in 2017-18 and 3.4 per cent in 2018-19. A sustained higher fiscal deficit gradually creates more inflationary pressure in the economy. India already has higher interest rates, which impacts the competitiveness of the industry.