Fiscal ambivalence: The NK Singh panel report on the FRBM Act could have explored new approaches...
"The dissenting view articulated by Chief Economic Advisor Arvind Subramanian needs to be taken seriously. As Economic Survey 2016-17 argues: “A mechanical comparison (of the debt-to-GDP ratio) is not an appropriate way of assessing India's strength. If fiscal and debt sustainability is about confidence and trust as revealed in the ability and willingness of governments to limit their debt levels and pay them off without disruption...then India's record is very good.” Subramanian has suggested targeting the primary deficit (the difference between revenue and expenditure excluding interest repayments) instead, since it implies whether the Government is collecting enough revenue to meet its running costs. The Survey points out that at high rates of growth, India’s primary deficit ought to have been lower. The Government “is dependent on growth and favourable interest rates to contain the debt ratio” — an admission of vulnerability to shocks."