ET

INDIAis probably running a very large stimulus package considering the problems it is facing vis-à-vis high fiscal deficit. High public debt and historically large fiscal deficit have stretched our public finances. While it is important to reduce the short-term pain of lower growth, it cannot be at the cost of high inflation, lower growth or both in the future. The fine balance required to manage prudence and stimulus is something which will be difficult to expect from a pollbound government but not much from the seasoned regulators.
India will also face the head wind of drop in future savings rate as government turns from saver to spender. It also needs to keep in mind that FY09 growth to some extent is front-ended by its stimulative policy aka high fiscal deficit. The back-ended price for the same needs to be kept in mind.
The government needs to focus on execution and efficiency. It needs to get bigger bang out of every buck that it is spending. Instead of spending money it needs to invest money wisely. Building check dams improves water level and helps in improving agriculture yield. Building kuccha road that exists only on map or will get washed away in monsoon doesn’t help any one. The government needs to attract capital flows into the country to augment shortfalls in savings which is so necessary to maintain investment and consequently the growth momentum. Our policies and execution need to be benchmarked against, say, Chinese standards and attempt should be made to outperform them.
Maintaining public finance under check will be a critical factor in generating investor confidence. Divestment, efficient tax collection, subsidy rationalisation and aggressive push to cut cost and wasteful expenditure are something which the government should implement on a priority basis. In an uncertain environment, it is critical to keep investor confidence high. If the government can stop contradictory communication from different heads, it will boost investor confidence. While there is a cost for financial stimulus package, there is only gain from the above referred alternative package. It will just require a nation to work together to overcome current tough environment.

Including offbudget items and state deficits, the overall fiscal deficit is already about 11% in the current financial year and will be at best one percentage point lower in 2009-10.


1.Goverment should be more specific to Implment the progrma
2. Build the capital generating infra
3.All ministries should expend the alocated resources
4. Insustry should reduce the profit margin and increse the revenue and consumer base
5. Capacity building in many areas so that as soon as world recover we are fready to face it

multi-pronged strategy to tackle illegal immigration from Bangladesh. This included border fencing, round-the-clock border surveillance, increasing the number of border outposts to 1,185 and induction of high-tech surveillance equipment like night vision devices.

the unchecked infiltration of Bangladeshis into the state had changed the demographic profile