An account for four months
- Vote Supriya or lose water, âthreatensâ Ajit
- 5th phase of elections: Moderate to high turnout on biggest voting day
- Dhowan takes over as Navy Chief, superseded Sinha resigns
- Congress releases CD of Uma Bharti calling Narendra Modi 'Vinash Purush'
- India to pay Russia for arms, ammo it sells to Afghanistan
Apart from the question of responsibility in the political sense, there was also little scope for further fiscal measures. As already announced by Montek Singh Ahluwalia, there were unlikely to be any further measures after the stimulus packages announced by the UPA government. In a macroeconomic context the expansion in the fiscal deficit from 2.7 per cent of GDP in 2007-08 to 6.0 per cent of GDP in 2008-09 is huge. As a starting point for an economy witnessing a slowdown and seeking to implement a counter-cyclical fiscal policy, there could not have been a more difficult time. Further fiscal expansion could erode confidence in the government's capacity to pay. This is seen to be happening with governments across Europe and no one should be under the illusion that it cannot happen to India. The budget estimate for the fiscal deficit in 2009-10 of 5.5 per cent is thus a correct starting point. If the slowdown gets worse then when the new government makes its budget proposals in June/July it could propose a larger fiscal expansion. This could happen either due to higher tax cuts, lower tax collection, higher expenditure or explicit bailout packages that may have to be offered in 2009. Further, the nominal GDP growth of 11 per cent used for estimating the "percent to GDP" numbers for the deficit is also unlikely to be achieved. The assumption that nominal GDP will grow at 11 per cent implies that if inflation is at 2-3 per cent then production must grow in real terms by 8-9 per cent. This, in a year when most predictions are already below the 6 per cent mark, is rather ambitious. Lower GDP numbers will translate into higher fiscal deficit ratios.
- As EC website crashes due to overload, party workers use apps to locate voters
- An entire society in Kothrud could not vote
- Chaos, anger across city over missing names
- Mulayam pushes third front, says will stake claim to PM post
- Don’t look at my candidates, votes for me: Maya to Dalits
- AAP biggies focus on Vishwas, Kejri seats, other units suffer