India fiscal deficit at (8.9% of GDP) might just better than Japan (9.9% of GDP) this year. But in 2013, India might top the list with FD at 8.8% of GDP vs. Japan’s 8.6% of GDP.
On India’s Fiscal misfortunes, IMF says:
In India, overall deficits for 2012–13 were revised upward to almost 9 percent of GDP, more than ½ percentage point higher than in the April 2012 Fiscal Monitor, mainly due to higher fuel subsidies and revenue shortfalls. A determined reduction in costly subsidies would be a strong signal of a credible fiscal turnaround. It would also allow relaxation of financial restrictions, spurring private investment and growth.
I was alarmed looking at IMF’s total deficit numbers. I just checked with RBI’s data on combined fiscal deficit of state and centre (see Handbook of Stats on Indian Economy; Table 236) . There are large differences in IMF and RBI data from 2010 onwards.
Need to understand the differences and data reporting..
Whatever the difference, it is on a common IMF scale. What will the response of our policymakers be? Denial of course…