Heed the Kelkar report

The report of the Vijay Kelkar Committee on fiscal consolidation argues that the Indian economy is “poised on the edge of a fiscal precipice”. The fiscal deficit is poised to miss its budgeted target by a large margin for the second year in a row — it could be 6.1 per cent of gross domestic product, a full percentage point higher than the Budget estimate. India is going through a demographic bulge, with millions entering the workforce yearly; fiscal space is needed to stimulate growth, or India’s demographic dividend will become a curse.

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