Wednesday, February 2, 2011

Liberal at fiasco or fiscal

Mr Venu writes with political hunches in coming Budget:
  • At a more macro level, Pranab Mukherjee is under severe pressure to consolidate the rising fiscal deficit as a means to lower inflationary expectations. The RBI, in its monetary policy statement last fortnight, has clearly pointed to high inflation as the main risk to growth and has called upon the Centre to use its fiscal instruments to complement the central bank’s effort to lower inflation expectations.
  • Pranab Mukherjee had delivered liberal doses of fiscal stimuli in the previous two budgets as the world economy remained shaky post the global financial crisis. One of the key outcomes of the liberal fiscal and monetary policies pursued around the world since 2009 is high inflation, which emerging economies, particularly, are grappling with. So clearly it is time for some roll-back of both monetary and fiscal boosters in emerging economies. India cannot escape that process, as inflation is the biggest tax on the poor. 

But there is hardly anyone, who can say boldly the current FM is liberal nor his past  Budgets were liberal in tone. 

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