Get the economy moving again

To rephrase former US President Bill Clinton: it's the fisc, stupid. With the fiscal deficit set to speed past 5.5% in 2011-12, the cascading effect on the rest of the economy is becoming toxic. Union finance minister Pranab Mukherjee relied last year on robust GDP growth to shave the fiscal deficit for 2010-11 to 4.7%, revised later to 5.1% (see accompanying graphic), taking benign advantage of the base effect of a larger nominal GDP. That option has narrowed this year with GDP growth likely to slip below 7%. 

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