Money

There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.

While Friedman may have been generous to suggest that government spends somebody's money on someone else, in Indian context I'd be happy if the government spends money for somebody else instead of on itself. I'm no economist, but a fiscal deficit amounts to borrowing money for current spending. In this light, the projected deficits of 12.3% GDP in the US and as much as 10% of GDP in India make for a very sorry reading. And the claim of 5.3% growth rate seems highly inflated as it is primarily driven by 17% growth in ‘community, social and personal services': in other words government sops ahead of the parliamentary elections.