Dreams are fine, mirage can be dangerous.

"India is expected to overtake Germany to become the fourth-largest economy in 2026 and Japan to become third-largest in 2034, according to a recent report by the UK-based Centre for Economics and Business Research (CEBR). It further said India is also set to reach a gross domestic product (GDP) of USD 5 trillion by 2026, 2 years later than the government's target." So keen is the government on the mirage of a $5 trillion economy that, "Finance Minister Nirmala Sitharaman on Tuesday unveiled Rs 102 lakh crore of infrastructure projects that will be implemented in the next five years as part of the government's spending push in the infrastructure sector." This amounts to about $1.5 trillion or more than half the GDP of $2.7 trillion. "The minister said another Rs 3 lakh crore of projects are likely to be added to this pipeline. These projects are on top of Rs 51 lakh crore spent by the Centre and the states in the last six years..." A deluge of spending, but where is the money? "The government is unlikely to complete the privatization of Air India Ltd, Bharat Petroleum Corp Ltd (BPCL) and Container Corp of India Ltd (Concor) by end March, leaving a Rs 40,000-50,000 crore hole in the budget. This is likely to further impair the government's ability to meet the fiscal deficit target of 3.3% of GDP, in a year where both direct and indirect tax collections have been well below expectations amid an economic downturn that has hit a six-and-half-year low of 4.5% in September quarter," wrote AR Misra. The government can increase its fiscal deficit by borrowing more but this may decrease private borrowing. "Evidence from India reveals that government investment actually 'crowds in' investment as these are made for the development of physical infrastructure," wrote Karan Bhasin. "Our fiscal deficit is 80% interest." Will the enormous spending on infrastructure increase GDP growth rate? "No. Growth needs a boost urgently. Spending on long-gestation projects on highways and railways will not help," wrote Puja Mehra. Increasing social payments to the rural population will stimulate growth by increasing demand. Finance Ministers cannot resist populist programs and, "This time round, spending plans are being worked out amid fervent calls for fiscal expansion to haul the economy out of its slump," wrote an editorial in the Mint. Trouble is, "Indian states run their own deficits too, after all, and the difference between the Center's intake and outgo is wider than it looks on paper because several government-run entities have also been operating beyond their means." India has gained from low oil prices and an inflow of funds from foreign portfolio investors because of low interest rates in rich countries, wrote Joshi and Tandon. However, as long as the global geopolitical situation remains volatile we must guard against external shocks. In short, itsy-bitsy changes are fine. Just don't splash out.