<b>A V Rajwade</b>: Cover the full ground

Adherence to a fiscal deficit target without full reform of govt accounts may not be sufficient

Most commentators on the Budget have complimented the finance minister on restricting the fiscal deficit to 3.2 per cent of gross domestic product (GDP). The debt raised to finance the deficit increases the debt to (nominal) GDP ratio, if the increase in debt is more than the increase in nominal GDP, projected at 11 per cent for 2017-18.
 
The Economic Survey released just before the Budget compared the government debt to GDP ratio of 17 large economies. To my surprise, our ratio at 68.5 per cent (2016), is very close to Germany’s 68.2 per cent (Japan’s ratio is the