MIHIR SHARMA: India's economic wrong turn
'Yields on India’s 10-year government security shot up 18 basis points after the budget was presented'
India remains a land of missed opportunities. When Prime Minister Narendra Modi came into office in 2014, he raised hopes that he would reform administration, fix regulations, super-charge the economy and reinvigorate private investment. One can debate how much he’s accomplished on those fronts. But his record on one issue - fiscal restraint - had seemed impeccable. Helped by low crude oil prices, which meant the government could raise fuel taxes without political blowback, his administration largely maintained a deficit-reduction path set by its predecessor. On Thursday, when Finance Minister Arun Jaitley presented the government’s annual budget - which in India is usually the year’s main economic policy statement as well - the government abandoned that commitment to fiscal consolidation. The ongoing financial year’s fiscal deficit was revised upward to 3.5 percent of gross domestic product and next year’s target was changed to 3.3 percent of GDP from 3 percent. Bond markets respon...
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