The one concern that has proved to be an over-riding factor in formulating this year’s budget is inflation. Nearly all the things done by the finance minister, and even things not done by him, has an explanation based on that one single concern.

This is the sharpest fiscal correction tried to achieve by any government in the last twenty years. One is advised not to go by the headline numbers of 5.1% fiscal deficit for this 2011 and 4.6% for 2012.

Within the 5.1% figure for 2011 is also included the bonus money received due to the auction of spectrum for the third-generation telecom services (3G) as well as the broadband wireless services. If that “one-time” gift is removed from the picture, 2011’s deficit comes up to 6.2% or maybe even more than that.

In attempt to come down from that high level, down to 4.6% every year is indeed quite an achievement. And as the government has not performed up to the mark on fiscal correction till now, the sole explanation there is that it recognises its own part in putting in more to the inflation issue.