Several points about this government’s deficit figures are to be borne in mind.

First, notice how far the government has departed from the limits that had been prescribed in the FRBM act, limits that were acknowledged all round to be necessary both as prudence and to maintain our credibility for investors and creditors abroad. That the gross fiscal deficit had climbed to an average of 7.7 per cent of the GDP in the late 1980s had raised alarm all round. Accordingly, under the FRBM legislation it was decided that this ratio must be brought down from 6.2 per cent in 2001-02 to 3 per cent in 2007-08; and that the revenue deficit must be eliminated by March 2008 and a healthy surplus must be built up in the following years. The GDF/GDP ratio will be more than double the target; the revenue account, instead of being a surplus will be in deficit — a deficit close to 5 per cent of GDP. Economists apart, the CAG has been compelled to make severe strictures on the gross irresponsibility that has resulted in these deficits, and charge the government with heaping burdens on future generations. Do you think that will make any difference to these know-it-alls? 

Second, the government certainly cannot claim any surprise at deficits having climbed so high. Several commentators outside Parliament; persons like Jaswant Singh, Yashwant Sinha and me, inside Parliament repeatedly showed how the Budgets — in particular the last Budget — were grossly underfunded, and that the country would be saddled with the costs of such subterfuge. To no avail.

... contd.