Behind the austerity call: The one macro number that suddenly matters again

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Synopsis

Over the next four quarters, one number will move the rupee, the bond yield, the FII flow data, and large parts of the equity market more than any other. That number has crossed key thresholds multiple times in the past 30 years and more. And each time the consequences have followed a recognisable pattern. Will it chart a similar path this time as well? Or will the impact be different?

PM Modi’s austerity appeal may have explicitly mentioned gold, fuel, cooking gas, and foreign travel. But the effort was really directed toward one number. A number that is not commonly understood as it is something mostly economists talk about. Ironically, however, it impacts everyone: Right from the government to companies to individuals. It is not the first time that this number has come into focus. In the past over 30 years, it has made

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