New Delhi: With a high fiscal deficit and inflation squarely challenging the Budget makers, Finance Minister Arun Jaitley said on Tuesday “mindless populism” in policymaking needed to be checked. Undoubtedly, Jaitley has no soft options but to unveil a tough Budget on July 10.
An interim budget set a deficit target of 4.1% of GDP for the financial year that began in April, but the fiscal gap has already risen to Rs 2,40,837 crore, which is 45.6% of the full-year target.
“Now India needs certain amount of fiscal discipline … there is hope that bold decisions will be taken now,” he said while addressing a meeting of the national auditors in New Delhi. Inflation has moderated in the last few months but it is still beyond the acceptable level.
India’s wholesale price inflation hit a five-month high of 6.01% in May. Food price inflation is near double-digits, with a late monsoon pushing up the cost of vegetables and dairy products. The government has also raised railway fares and fuel prices as crude oil prices have risen on international markets.
A shift from consumption to investment is expected to correct the fiscal imbalances, which means paying a higher price for quality services.
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