The quote discusses how a period from 2004 to 2008 saw significant government spending due to several favorable economic conditions. During this time, both government revenues and national income growth were on an upward trajectory, providing the financial flexibility needed for such expenditure. Additionally, there was stability in external factors affecting the economy, which further facilitated this liberal fiscal policy.
The deeper meaning of the quote suggests a shift in economic dynamics starting from 2009. It indicates that the previously stable and prosperous economic conditions began to deteriorate gradually. By 2012, these supportive pillars had become significantly weaker, leading to challenges in maintaining the earlier levels of government spending and overall economic stability. This highlights how sustained fiscal policies rely heavily on robust economic foundations, which can be easily undermined by external or internal economic shifts.
The quote is attributed to Sanjaya Baru, an influential Indian economist and former editor-in-chief at The Economic Times. Known for his insightful analyses of India's economy and its political implications, Baru often comments on macroeconomic policies and their impact on the country’s development trajectory. His expertise and experience provide valuable context to the interpretation of such economic observations.
