The looming fiscal challenge

27 APR,2020 | MEDC


The government has so far come out with a package worth Rs. 1.7 trillion for the most socioeconomically vulnerable sections affected by Covid-19. However, it isn’t yet clear as to how the government plans to support the broader economy and simultaneously manage its own finances. Managing public finances will be tricky in these circumstances. Fiscal options will need to be reconsidered within the confines of logic. While inflation may be muted in the short term due to the pandemic related demand shock, its behaviour could be unpredictable in a year’s time. Deficit financing is also not a solution to this problem. Luckily, the RBI has adequate forex reserves, so India’s external position is sound. The government needs to evaluate all available fiscal options carefully to enhance India’s economic resilience to black swan events, like this global virus outbreak.

*Photo Credit: Google

Comments



Featured Posts



Recent Posts


EMERGING ISSUES IN AEROSPACE INDUSTRY: AN INDIAN PERSPECTIVE


Tourism and its contribution to the Economy


Interactive Meeting with Mr. Jaykumar Rawal Hon'ble Minister for Tourism & Employment Guarantee Scheme Govt. of Maharashtra


De-coding skills-based pro-bono


FOOD PRICE VOLATILITY


Food Inflation in India: An Assessment




Archive




© Copyright 2019 MEDC, All rights reserved
Website Design and Develop By: SCI Knowledge Interlinks