Borrowing surprise

New Delhi: If there are two antonyms in the country’s vocabulary, surely they must be the UPA and savings. This government’s record of profligacy is for all to see.

Surprisingly, on Thursday, the government said it will stick to its plan of borrowing Rs.2 trillion for the second half of the fiscal. This comes on the back of the frenetic pace at which the fiscal deficit target approached breaching point. Even now, few believe the budgeted target can be maintained.

The key to fiscal consolidation for this government lies in the control of expenditure, especially non-Plan expenditure (items such as oil and fertilizer subsidies). It remains to be seen how these numbers are compressed.

One can analyse the causes of spending over-runs later (they should not be discounted yet), for this is a time to celebrate good news. The bond markets have cheered up a bit. Surely fiscal pessimists too can.