A deficit in fulfilling promises.

In this year's budget the Finance Minister had projected a fiscal deficit of Rs 6.24,276 trillion, or 3.3% of GDP, but,  "Between April and November 2018, the government had already run a fiscal deficit of Rs 7.16,625 trillion or 114.8% of the fiscal deficit target that the government had hoped to achieve," wrote V Kaul. The government had hoped to collect Rs 6.03,900 trillion from the Goods and Services Tax (GST) but in the nine months, from April to December 2018, it has got Rs 3.41,146 trillion, just 56.5%. At this rate there will be shortfall of Rs 1.49,000 trillion. A Mukherjee found 5 reasons why the government is responsible for failing to control the fiscal deficit. "GST was a long-delayed attempt to replace a bewildering array of sub-national taxation with a unified levy. But it wasn't the only fiscal design marred by weak design and poor implementation." Rising debts in electricity distribution companies, farmer loan waivers, failure to privatize public sector companies and a failure to stimulate the private sector have contributed to the rising fiscal deficit. Despite earning in excess of Rs 10 trillion from high excise duties on petroleum products during its term, the government has borrowed an extra Rs 29 trillion which has increased its debt by 49%, from Rs 54.90,763 trillion to Rs 82.03,253 trillion. "India's general government debt of about 70 percent of GDP in 2017 isn't much different from China's, based on IMF estimates. But China, for all its overcapacity issues, at least has used public debt to create assets; India hasn't." The Prime Minister Modi's party the BJP expects more handouts in the hope of persuading people to vote for it. Markets are apprehensively expecting increased spending on social schemes in the budget on 1 February. The government has already resorted to 'creative accounting' to make the deficit look healthier. It forced public sector ONGC to borrow money to buy public sector HPCL and showed that as disinvestment, thus transferring its borrowing on to ONGC. It has also postponed paying for its expenses till after the elections. To increase revenue it appointed a retired civil servant as Governor of the Reserve Bank who will transfer an extraordinary dividend of Rs 400 billion to it. Modi was elected on a promise to end 'tax terrorism' but soaring disputes on unjust tax demands show how empty that was. Thousands of taxpayers are being persecuted for minor defaults in depositing taxes. Multinational companies have been threatened with backup tax demands in case they win cases against taxes on transfer pricing. With so little time before the elections Modi should refrain from making too many promises, wrote M Sharma. When you talk so much you have to find something to say. Fulfilling is impossible.