India’s fiscal deficit has been a subject of concern for many years. With a target of 6.4% of GDP for the current fiscal year, the government faces an uphill task. Strategic borrowing can help manage the deficit.
For instance, the government can consider issuing sovereign gold bonds to raise funds. This can help reduce reliance on market borrowings and keep interest rates in check. Additionally, the government can also explore other options like pension funds and insurance companies to raise long-term funds. By adopting a strategic approach to borrowing, the government can ensure fiscal prudence and meet its development goals.
The key is to strike a balance between borrowing and fiscal discipline.