Union Budget 2016-17: Waltzing To Stability

Now that the dust has settled, and the din has died down, and the sound-bytes have shot into the ether, and the op-eds have swung between utter condemnation and relentless fawning, one can actually sit down and assess the budgetary proposals free of distraction. The best starting point for this is the speech of Dr. Raghuram Rajan, the current governor of the Reserve Bank of India (RBI) at the inaugural Ramnath Goenka Memorial Lecture at New Delhi on March 12, 2016, which amongst others noted that "the monetary reforms of this Government will stand out as one of its signal achievements".

The speech very correctly and succinctly notes that: (1) achieving pre-2008 growth rates in the immediate term is difficult with the debt overhang caused by, governments, households and banks racking up huge amounts of debt prior to the 2008 crisis; (2) in an environment where the "international investor is manic depressive", India should ensure that the domestic environment "promotes