Illogical prioritization

Govt should get back to 3% fiscal deficit target by 2010-11: Virmani

Chief Economic Advisor in the finance ministry Arvind Virmani said the country should aim at limiting its fiscal deficit--the gap between
total spending and most of the receipts--to the 3% mark by 2010-11.
India's fiscal deficit is projected to more than double to 6% of GDP this fiscal against the budgetary target of 2.5%. For the next fiscal, the deficit is estimated to be 5.5% of GDP. Virmani said India has provided one of the largest stimuli in the world, leaving aside countries that are directly the source of the crisis.

I agree that fiscal deficit should always be watched. But this should not stop the government from investing. Govt should not be scared to invest just because the fiscal deficit is going up.

This is a global recession. It is an exceptional time. How can we talk about containing the fiscal deficit at this time. Government should definitely borrow more and invest in public private partnerships. Ofcourse this may drive up the interest rates. But a fine balance will need to be maintained.

To maintain the deficit new measures should be put in place to stop the revenue leakage. Still a significant percentage of the revenue is lost as people fail to pay income/sales taxes.

INDIAN GOVT- DONT STOP INVESTING. THIS IS THE ONLY WAY RIGHT NOW TO MOVE OUT OF THIS SLUMP QUICKLY