Dr Chakravarthy Rangarajan, one of the architects of India’s original Fiscal Responsibility and Budget Management framework, has cautioned against replacing the country’s 3% fiscal deficit target with a more flexible debt-to-GDP anchor.In a wide-ranging interview with BasisPoint Insight, the former Reserve Bank of India Governor said loosening the existing rule would crowd out private investment and push up interest rates by overstretching India’s already limited pool of household financial savings.
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