The few countries that have avoided such booms and busts typically have done so with sound policy frameworks. As a country that does not belong to any power blocks, we do not ever want to be in a position where we need multilateral support. It will be all the more important to get our policy frameworks right.
Clearly, a sound fiscal framework around a clear fiscal consolidation path is critical. The Dr Bimal Jalan Committee’s report will provide a game plan for the former, while the government has clearly indicated its intent to stick to the fiscal consolidation path that has been laid out.