In the midst of all the boosterism that is going on about India's economic performance, the restrained tone of the finance ministry's mid-year review is blessed relief.
After the "India Shining" ad campaign, the Goldman Sachs report on the BRIC economies and the upbeat tone of the leading lights of the government (LK Advani virtually announced at a meeting that India was now part of the "first world"), not to speak of corporate chieftains wanting to develop the India brand to reflect the new mood, any measure of balanced realism is a relief -- if nothing else because everybody should know that the climb out of the morass has just begun, that there are a million things to get done, and that if we rest on our laurels too soon, all the dreams of the "coming golden age" (the title of one of the sections in a power-point presentation by Vijay Kelkar in Washington) will disappear as quickly as the rainbow in those "India Shining" ads.
As Mani Shankar Aiyar has pointed out (and it is true even if he is a Congress politician), the Indian economy has done just as well in past years when it has been bouncing back from a drought.
The question is of sustainable growth at the rate of 6.5 or 7 per cent, let alone the government's exaggerated hopes of 8 per cent.
While the many pluses that will push us along are now a happily familiar list, the minuses that will drag us down haven't gone away just because we are all celebrating, and remain to be tackled.
One could start with the fiscal deficit, because the budget-making exercise has begun and one has no choice other than to get real about cold, hard numbers.
Under the new fiscal responsibility law, the government has to reduce the revenue deficit from nearly 6 per cent of GDP last year to zero by 2007-08, or four years from now.
How is this to be done? Kelkar's power-point has some pointers: direct taxes will grow by 1.5 per cent of GDP (with 2000-01 as a base), and excise duties will grow by 2.5 per cent of GDP. Kelkar argues that these are realistic; to me they look like a pipe dream.
GDP itself, let us assume, will be growing at 7 per cent annually between now and 2007-08, with inflation at about 4 per cent.
Work out the compounded numbers and what they tell you is that nominal GDP will grow by more than 50 per cent in four years, and if the projected tax growth is to happen, then the revenue from income and corporation tax has to more than double in the next four years.
That means growing at an annual rate of nearly 20 per cent (against just 12 per cent in the last three years). The excise projections are even more daunting: revenues must grow over the next four years at 24 per cent annually (from a 14 per cent rate in the last three years).
However optimistic one might be about tax revenues reflecting the improved economic climes, these numbers are so out of line from past trends (especially when one of the four budgets between now and the target date will be a pre-election budget) that one might as well put them aside and see what else is possible.
It then becomes impossible to escape the conclusion that at least some of the attention will have to focus on cutting expenditure.
Like subsidies, for instance, which the mid-year review mentions and which have doubled in the last three years (growing twice as fast as tax revenues).
But will a pre-election government raise fertiliser and foodgrain prices? Not on your life. What about privatisation, which the mid-year review does not even mention?
The fact is that the government's 120-odd loss-making public sector enterprises have trebled their losses in the past decade, growing at an annual average rate of 12 per cent.
Someone has to plug the hole in that sink before it gets bigger.In short, some hard decisions have to be taken. If and when they are, the national mood will sober up pretty quickly. So while it is good to be optimistic, and uplifting to celebrate our successes, let us not lose touch with reality.