Fiscal imprudence | Business Line

Rebooting roads | Business Line

The Hindu Business Line,
October 17, 2015
Fiscal imprudence
This refers to SS
Tarapore’s article “The exchequer is not a cookie jar” (October 16). The need
for a prudent ‘Asset Liability Management’ approach in handling government
finances is excellently brought out. The ‘take as it comes’ approach to revenue
and ‘pay as you go’ approach to expenditure, which is a legacy of the
pre-independence governments, needs a quick re-visit. If trust is restored, the
accumulated wealth in the form of gold and jewellery as also hidden savings in
the form of unaccounted money and ‘undervalued’ assets, will surface, which
will be available for investment.
Short-term measures
like dipping into the reserves of central bank and selling ‘family jewels’ for
meeting fancy targets of modern economic planning (showing a lower fiscal deficit)
without ensuring corresponding reduction in debt or increase in productive
assets can be suicidal, in the long term.



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