The recent surge in government borrowing has sparked concerns about the nation’s fiscal health. With a fiscal deficit projected to reach 6.8% of GDP, policymakers must prioritize debt management. Implementing fiscal rules and increasing transparency can help mitigate risks. For instance, the establishment of an independent fiscal council can provide unbiased assessments of budgetary decisions.
By adopting such measures, the government can ensure a more sustainable fiscal trajectory and maintain investor confidence. As of 2022, several countries have successfully implemented fiscal rules, resulting in improved debt management and increased economic stability. The time for India to follow suit is now.