Fiscal consolidation without political consensus risks social unrest. In light of France's experience, discuss lessons for India's own fiscal-consolidation path.

In October 2026, riots across France damaged over 3,000 businesses and led to about 2,400 arrests. They were set off by a budget that raised taxes and froze social spending [1]. France shows that fiscal consolidation is a political project as much as an economic one. Without broad agreement, even a necessary adjustment can backfire.

France: Consolidation Without Consensus

• Fiscal stress: The deficit was 5.1% and debt 115.5% of GDP in 2025, and debt is projected to reach 120.9% by 2027. Interest costs rose from 1.3% to 2.1% of GDP between 2020 and 2025 [2].
• Political fragility: PM Lecornu leads a minority government, and Macron's approval rating is 15% [1]. The OECD notes that the 2026 budget fell short of its plans for lack of political support [2].
• Reform reversal: The 2023 pension reform was suspended to keep the government alive. This cut near-term savings and created new uncertainty [3].
• Flawed design: Public spending is 57.2% of GDP, and tax breaks cost almost 3% of GDP [2]. Yet the cuts fell on visible social programmes. When students protested, police used tear gas, and the protest became an anti-government movement [1].

Lessons for India

• Rules over yearly bargaining: The FRBM Act, 2003 and the new debt anchor aim to bring central debt to 50±1% of GDP by March 2031 [4]. The IMF makes a similar case for automatic adjustment mechanisms that reduce political deadlock [3].
• Gradual, growth-friendly path: The fiscal deficit target moves from 4.4% (RE 2025-26) to 4.3% (BE 2026-27) [5]. This steady glide avoids a sudden shock like France's.
• Expenditure quality: The IMF favours expenditure-led consolidation [6]. For India, that means cutting leaks through DBT, rationalising subsidies and removing tax exemptions, while protecting capex, health and education.
• Consensus institutions: The GST Council (Art. 279A) shows how cooperative federalism can build agreement. The repeal of the farm laws (2021) shows that reforms imposed without consultation tend to be reversed.
• Protect the vulnerable: Adjustment should not fall on the young or the poor. Targeted safety nets and proportionate, dialogue-led handling of protests keep reform legitimate.

Fiscal discipline lasts only when people see it as fair. India should combine rule-based targets with consultation, well-designed cuts and social protection. This would make consolidation a shared national project, in the spirit of cooperative federalism and SDG 16's call for inclusive, accountable institutions.