Fiscal prudence thrown to the winds

The twin challenges facing the economy are low growth rate and high inflation. Coping with this is a demanding task for fiscal management. The added pressure of the coming election makes basic fiscal reform an urgent necessity. India’s track record in fiscal responsibility is not encouraging. Even a decade after the Fiscal Responsibility and Budget Management (FRBM) Act 2003 was passed by Parliament, the targets for fiscal deficit have not been met. Why is this, what does it imply, and what action should be taken?

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