As India is still a developing country, it is natural for our government to spend much more money than what it collects by means of taxes, duties etc. This excess spending results in annual budget deficit which is met by loans (called national debt) borrowed from bond market. As such, budget deficits are not bad if the excess spending is more towards investments for the growth of economy. On the contrary, if the excess spending is more towards consumption in the government, then budget deficits will backfire on us with higher inflation and more taxes in future. So, be aware of our government’s budget deficit and whether that deficit is invested or wasted!
