Don't mimic advanced world: Economic Survey

Cautions against fiscal activism; FRBM Act important, but needs some modifications

The Economic Survey 2016-17 cautioned against fiscal activism and blindly aping fiscal policies adopted by the advanced economies. Fiscal activism refers to too much reliance on counter-cyclical policies such as giving a boost to the economy when facing a downturn. In fact, in India’s case, there is a tendency to widen the fiscal deficit, both at the time of boom and downturn, pointed out the Survey.

If adopted in the Budget for 2017-18, the prescription may be contrary to those who are advocating the need to relax fiscal deficit targets significantly. 

The fiscal consolidation road map has pegged the Centre’s