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such bankrupt ideas/ideologies, proven by experience to be false, and to keep pursuing the unpursuable in the ostensible interests of caring for the poor and the common man, while achieving precisely the opposite with their policies.
In this Budget, will the FM educate his political peers about the direct, strong connection between the current account deficit (CAD), which is out of control (because price subsidies are causing demand for energy to spiral and encouraging egregious waste), and the central fiscal deficit, which now is at the tipping point of going out of control as well? Will he use this Budget to explicate clearly that India must now “export or die” if it is to finance its ever-growing imported energy (and food) needs that will balloon when growth and real income growth are restored to their halcyon 2004-08 trajectories?
Those who argue that India can still finance a CAD and fiscal deficit of 3% indefinitely seem unfamiliar with the Krishnan dictum that “the long-term has caught up with us”. Consider the mess in the eurozone, where it was a tenet of public faith that one could finance budget deficits of 3% indefinitely. The result: the eurozone is over-indebted, in deep crisis, and will take years of reform to pull itself out, while sacrificing a generation in the process. No deficit is sustainable forever. If one runs deficits for too long, one has to aim at running surpluses in the future. Being incontinent for forty years (as India has been) has the same effect as being profligate for ten. We have been both. Will the Budget aim at the ‘impossible dream’ of establishing the foundations for generating future surpluses or will it continue to aim at ‘least-worst sub-optimisation’ that has become the leitmotif of the UPA-led government?
The last few weeks have seen an inexhaustible flow of gratuitous, unsolicited advice to the FM in the media and other fora. Fortunately for us—with his extraordinary intellect and reserves of (uncommon) common sense—he will ignore 99% of it. Thank heaven that for this Budget we have an FM in situ who understands intuitively India’s globalised economy of the 21st century much better than his ‘stuck-in-the-1970s’ predecessor did, and better than most of the Opposition still does. This FM knows what he is doing. He is acutely aware of how dependent and interdependent India is on global cross-border trade, investment and capital flows. He realises, as a