Shouldn't create facts, should he?

Finance Minister of India refused demands for lowering taxes on fuel, writing, "It is intended to push India into an unmanageable debt, something which the UPA government left as its legacy. We must remember that the economy and the markets reward structural reforms, fiscal prudence and macroeconomic stability. They punish fiscal indiscipline and irresponsibility." Indeed, they do. The government missed its fiscal deficit target last year and will miss it this year again. This despite taxes of Rs 40 on a liter of petrol costing just over Rs 78 per liter. The cost has come down to over Rs 76 per liter. Prices have gone up in the US as well. It now costs an average of $3.5 for a gallon of petrol, which works out to about Rs 63 per liter, at an exchange rate of Rs 68 to one dollar. As for fiscal irresponsibility, this government has started 18 new social schemes since it came to power in May 2014. The list does not include farmers' loan waivers by various BJP states which could add a bill of Rs 2.5 trillion to government expenditure. Then there is the affordable housing scheme for subprime borrowers which could add another few trillions in bad loans to banks. Hardly examples of "fiscal prudence and macro-economically responsible behaviour". Despite a 21.18% rise in exports to $28.86 billion in May the trade deficit jumped to $14.62 billion because imports rose to $43.48 billion. Last year current account deficit, CAD, was a huge $160 billion which is 1.9% of GDP. Besides the price of oil during much of the tenure of the UPA government was near or above $100 a barrel and started dropping steeply when this government came to power, reaching a low of $30 a barrel in February 2016. Low price of oil and zero interest rates in developed economies led to an influx of foreign investment. The Federal Reserve in the US raised its Funds Rate to 1.75% a few days back and the European Central Bank is to end its bond buying program, or quantitative easing, by December. Foreign investors have sold off $4 billion worth of bonds and equities this year and the sell off could rise as inflation increases and the rupee falls. If oil had stayed at $100 a barrel India's CAD would have been 6% of GDP, wrote SZ Chinoy. The real exchange rate of the rupee was overvalued by 20% which destroyed Indian industry because of cheap imports. This is known as the Dutch disease. It is not the fault of oil and gold, wrote M Chakravarty. Our non-oil merchandise exports increased from $252 billion in 2013-14 to $266 billion in 2017-18, which is a compound annual growth rate, or CAGR, of just 1.36%, while our non-oil, non-gold imports increased from $252 billion to $319 billion, which is a CAGR of 6.07%. This increase in imports was not due to capital goods but due to consumption, which is because of a strong rupee. Jaitley is a lawyer so he can create stories. He cannot change facts.