Budget and the world | The Indian Express

Budget and the world | The Indian Express

Written by Sanjaya Baru |Updated: July 9, 2019 6:29:57 am

The writer is Distinguished Fellow, Institute for Defence Studies and Analysis, New Delhi.

Budget and the world

Resisting the temptation to print money and spend one’s way to growth, the finance minister has opted for incentivising private investment and borrowing abroad.

If the government is able to stimulate new economic activity and thereby ease the domestic fiscal constraint, it will have more leg room to spur growth. (LSTV/PTI Photo)

An unexpected announcement in Finance Minister Nirmala Sitharaman’s Union budget speech was the proposal for the government to raise funds globally by borrowing abroad to bridge the deficit at home. It is not an idea one readily associates with a nationalistic political party like the Bharatiya Janata Party. The reason why since 1991 successive governments chose not to seek fueling growth through external borrowing was because of the terrible memory of what excessive and short-term borrowing in the 1980s did to India’s global standing.