In a 2020 address to the nation soon after the outbreak of covid, Prime Minister Narendra Modi cited age-old wisdom that advised against losing control of three things: fire, debt and disease. To cushion India's economy from the pandemic's shock, though, government spending had to vastly exceed its inflows, taking its fiscal deficit to 9% plus of GDP in 2020-21. The reversal of this debt-raising fiscal expansion since then has followed a glide path with 4.5% as the fisc's aim, to be achieved by the next Union budget for 2025-26. As no further target for it has been set, the Fiscal Responsibility and Budget Management (FRBM) Act's goal of 3% looks likely to keep gathering dust. Signalling a shift in approach, the last budget revealed an intent to target the level of public debt, rather than the annual fisc, in subsequent years as a way to keep overspending in check. This conforms with the PM's prudent advice of 2020, but what exactly does it imply?
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