By Aarushi Singh
Many steps were taken by the government to
reduce the fiscal deficit and improve the macroeconomic conditions of the
country and one of this is the Fiscal
Responsibility and Budget Management Act (FRBM), 2003.This act was
initiated by the Parliament of India to restore financial discipline, reduce
fiscal deficit and the overall management of public funds.
The
main purpose was to eliminate revenue deficit of the country and bring the
fiscal deficit to a manageable level of 3% of the GDP March 2008.But those
targets are yet to be reached.
Although there are lesser problems at the
moment but government needs to boost the public investments to revive growth.
This revival in public investment is important to cover up for the low private
investments. The private sector spirits are on a break and there revival
depends upon the government’s actions to revive investments.
It is accepted that the debt to GDP ratio
of the Indian Government is high (70%) but it can be brought down by expanding
GDP at a fast pace. Therefore the Indian government must indulge in more
investments and less debt waivers.
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