Chapter 6. India: Dealing with Perennial Fiscal Deficits
Author:
Ms. Mitali Das
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Language:
English
Print Publication Date:
09 Aug 2013
Keywords:
BOOK; deficit; surplus; saving; product market; interest rate; current account; current account surplus; surplus country; countries domestic; private sector; Current account surpluses; Fiscal consolidation; Current account deficits; Global; Europe

Abstract

India’s fiscal imbalances have remained large despite a sustained period of high economic growth. Large budget deficits and high public debt can be traced to a political economy that exerts strong pressure on spending, a weak revenue system, and financial restrictions that permit weak fiscal balances to persist with little market stress. At the same time, high growth and favorable demographics have caused private saving to surge. The perpetuation of fiscal imbalances poses risks for macroeconomic stability, as evident from recent developments in major advanced economies. Fiscal adjustment is needed to reduce imbalances and sustain growth.

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Cover Global Rebalancing
Global Rebalancing
A Roadmap for Economic Recovery
ISBN:
9781475573664
Publication Date:
09 Aug 2013
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781475573664.071
Pages:
178