For long, Indian budgets have followed a traditional path: ever increasing expenditure leading to budget deficit which is financed by borrowings. In last one decade, budget size and government debt have tripled.

However, in the last three budgets, Union finance minister Arun Jaitley has been trying to change that narrative. Rather than respond to demands to spend more money, he has stuck to fiscal discipline. When he presented his first budget in 2014, 28 paisa out of every rupee spent by the Central government was through borrowings. In the last three budgets, Jaitley has managed to bring this down to 17 paisa.

This path tends to be easier when the economy is growing fast, because the government can collect more tax, and depend less on borrowings. Jaitley’s budget aims to achieve this even when the economy is growing at 7%.

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