Former chief economic advisor to the Union Government Ashok Lahiri said Wednesday the Central Government's budget proposals for 2023-24 combined caution with optimism in the right doses.
In an exclusive interview with PTI, he said it would have been imprudent to take more risks on the policy front, given the uncertainty over the geopolitical situation and energy prices.
Asked whether the budget could have been more aggressive on the fiscal deficit front, Lahiri, also a BJP MLA of West Bengal, said, "There are people who believe that the government should have spent more."
He said it is not possible to spend more and not levy taxes and also not have a fiscal deficit.
Asked about whether more could have been done to promote growth, Lahiri said “I think the government has struck the right balance” between choosing on promoting growth while safeguarding macro-economic stability. “Given the geo-political uncertainty, the uncertain energy prices (which have gone up over the last few years), it would have been impudent to take more risks on the policy front,” the economist said.
He pointed out that taking more risks by pushing growth beyond a limit would have “taken more chances on the inflationary front, while trying to be conservative would have sacrificed growth.”
Replying to queries on whether the debt levels being run up would be sustainable, Lahiri said,” If you look at the fiscal deficit path, the glide path seems to be quite reasonable. It has come down to 5.9 per cent (in 2023-24, as against 6.4 per cent last year).
He pointed out that by 2024-25, the central government is planning to bring the fiscal deficit or the difference between the government's income and expenditure which is usually made up by borrowing, down to 4.5 per cent.