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Why Modi government is moving away from the path of economic austerity The popular conservative economic outlook has been widely proven to be unsuccessful in helping struggling economies get back on their feet. Feb 09, 2021 · 01:30 pm Austerity's failure to bring economies out of deep distress could be the reason behind Finance Minister Nirmala Sitharaman’s stance on increased government spending. | Prakash Singh/AFP The Narendra Modi government, which kept a hawk-eye on spending over the past seven years, has said that the fiscal deficit for 2020-’21 will stand ...

February 8, 2021 The Narendra Modi government, which kept a hawk-eye on spending over the past seven years, has said that the fiscal deficit for 2020-21 will stand at 9.5%. This would be the highest at least since India liberalised its economy in 1991. For context, the fiscal deficit for 2019-20 was 4.6% of India’s gross domestic product (GDP). On the face of it, a high fiscal deficit—the difference between the government’s revenues and expenditure—is alarming. It increases government borrowings and sends it into an interest repayment cycle, which only further increases spending in t...