Economic survey 2020-21: Forget rating agencies, spend without fear

Government spending becomes imperative at the time of excessive risk aversion in the private sector

The Economic Survey endorsed continuation of the expansionary fiscal policy to sustain recovery in demand as the economy comes out of the pandemic shock.

Coming down heavily on global rating agencies, it suggested that India’s fiscal policy should not be restrained by ‘biased and subjective’ ratings and should focus on growth and development. To drive home the point, the Survey quoted Rabindranath Tagore’s famous lines “where the mind is without fear”.

In the April-December period, the fiscal deficit widened to 145 per cent of the Budget Estimate for FY21. Economists estimate the fiscal deficit to widen to somewhere between 7 per cent