Arun Jaitley likely to take the stimulus route to economic growth

Investment demand in the economy is expected to contract in 2016-17

Finance Minister Arun Jaitley may significantly increase public investment in infrastructure in the Budget 2017, offering fiscal stimulus to boost economic growth at a time when private investment shows no signs of a pick-up.

Last year, chief economic adviser in the finance ministry Arvind Subramanian advocated a stimulus, but the minister decided to stick to the fiscal deficit target of 3.5 per cent of the GDP, fearing a backlash from investors and rating agencies.

“Different schools of thought have argued either in favour of fiscal consolidation and stability or for a less aggressive consolidation and for boosting growth. I have weighed the