This article looks at the problem of achieving a high growth rate while enhancing social welfare and imposing fi scal discipline. It presents evidence to show by looking at the relationship between various measures of fi scal defi cit and growth that it is the quality of the defi cit that matters for growth. It is important to take into account the quality of expenditure that is reduced to curb the fi scal defi cit, and avoid the tendency to create capital account surpluses for reducing the gross fi scal defi cit. The United Progressive Alliance government has followed this short-sighted strategy all through and the budget for 2013-14 is no exception.
