Political populism, on the other hand, contributed to increased government spending on subsidies. The share of fiscal deficit, that is the deficit in the government budget and the government’s interest payment obligations in national income, shot up from an average of 6.3 per cent in the Sixth Plan period of 1980-85 to 8.2 per cent in the Seventh Plan period of 1985-90. Most economists regard this to be too high and prefer the number to be below 3 per cent. To make matters worse, the internal debt of the government also went up from 36 per cent of GDP at the end of 1980-81 to 54 per cent of
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