views on budget deficit

There is doubt  in the mind of budget watchers that, the effects of strict adherence to the 4.1% of target regarding fiscal deficit in this year’s budget will cause damage to the growth process JM Keynes has suggested expansion in government expenditure during  sluggish economic situation . The fear is , if strict adherence to the deficit target   is still attempted , it may probably  be at the expense of the social sector expenditure The economists feel that, any attempt to cut down expenditure on social infrastructure such as education, health and training  will have serious implications on human capital formation in a nation with large number of un skilled and labourers, Therefore such an attempt is likely to affect physical capital formation too. Similarly any reduced  priority treatment to agriculture and small sector  in the budget allocation  will hamper growth process severely .  Hence the 4. 1% fiscal deficit target can wait till the Indian economy gears up and gets into the path of recovery .