SHUNNING FISCAL ADVENTURISM

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In the run-up to the budget, there was enormous pressure on the finance minister to launch a fiscal stimulus so as to pump-prime the economy
There is already considerable stimulus in the system.
The finance minister took a step towards transparency by admitting to off-balance sheet borrowings of 0.8 per cent of GDP for both the current and next fiscal year — acknowledging that the fiscal deficit would actually be higher at 4.6 per cent and 4.3 per cent of GDP respectively
Fiscal pressures will undermine the Reserve Bank of India’s struggle to revive investment by bringing down long-term interest rates
It could result in a sovereign ratings downgrade and jeopardise efforts to attract foreign capital.
Can also stoke inflationary pressures
As much as the headline fiscal deficit numbers are a cause for concern, the underlying quality of fiscal consolidation is a bigger concern
Revenue deficit is actually going up
More than two-thirds of what the government is borrowing is going to finance current expenditures like salaries, pensions, interest payments and subsidies