New Zealand showed the way.

"More than 30 years ago, some relatively youthful central bank and Treasury economists in New Zealand were grappling with how to bring to decades of double-digit inflation under control in an economy less than 1% the size of its US counterpart." Reuters. "What if, they asked, they just told everyone the rate should be much lower - say roughly 2% - and then aim for that?" "I just announced it was gonna be 2%, and it sort of stuck," said Roger Douglas, the Labour Party Finance Minister. The 2% inflation limit spread round the world. Prior to that "Governments had engaged in spending sprees to win votes at the expense of inflation." Contrast that with India. "India's central bank...cut its inflation forecast for the country for this fiscal year as the worst of price pressures is seen to be behind, but the governor flagged stickiness of the core inflation to be a matter of concern." ET. Inflation is predicted to be 6.5% instead of 6.7% in 2022-23. Inflation for the next financial year is expected to be 5.3%. The Reserve Bank's (RBI) mandate is to target 4% for consumer price (CPI) inflation with a range of 2% on either side. ET. The wide range of 2-6% is meant for occasional slippage and not to claim success after achieving a level slightly less than 6%. CPI inflation fell to a one-year low of 5.72% in December because food inflation fell to 4.19%. qz.com. But even in food, vegetable prices fell but cereals increased by 13.8%, milk by 8.5% and spices by 20.3%. "Core inflation (excluding food and fuel) has remained elevated at around 6%for the past many months." "India is a consumption-led economy, with private consumption contributing more than 55% to the GDP," wrote Rajani Sinha. "While the upper-income category is showing strong pent-up demand as reflected by jump in sales of luxury goods and services, the lower income category remains cautious in its consumption spending." Poor people suffer much more from rising prices. "While direct consumption boosting measures are a quick fix solution to spur the economy, any further stimulus would have to come at the cost of putting pressure on the government's fiscal balance and inflation." That explains why the RBI is so reluctant to increase interest rates. In this year's Union Budget, "Fiscal deficit in 2023-24 is targeted at 5.9% of GDP, lower than the revised estimate of 6.4% of GDP in 2022-23." PRS. Fiscal deficit is the government's market borrowing to meet the shortfall in revenue. Even though fiscal deficit is predicted to be lower, "The ratio of public debt to GDP is expected to increase over the next financial year, despite this fiscal correction," wrote Niranjan Rajadhyaksha. "India's debt ratio is projected to be 84% of its GDP by the end of 2022, which is higher than many emerging economies, but its debt is a little bit easier, a senior IMF official has said." The Hindu. One way to reduce debt is by allowing higher inflation, the higher the prices the higher is the tax collection on goods and services (GST). "The International Monetary Fund (IMF) has estimated in its recent report on the Indian economy that the primary deficit consistent with stabilizing public debt is 2.3% of GDP." General election in 2024. Inflation helps the government, hurts the poor and the rich don't care. New Zealand's government cared for its people. Ours don't. It's not fiscal deficit, it's a deficit of character.