Chakravarthi Rangarajan on Monetary Policy After Liberalization
Ideas of India
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The Importance of Fiscal Deficit in India
From 1991 onwards, the direction in which we wanted to move was clearly stated. But as I said that the fiscal deficit went beyond what is considered to be desirable and reasonable, then it has an impact on RBI. In fact, even in very good years, that means years in which India had the very high rate of growth of the economy. Even in that year, I think the fiscal deficit was more than 3% of the GDP. So, therefore, all these legislations also have their limitations. All that was required was for the government of India to put before the parliament why they could not abide by the room.
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