Economic Survey tries hard to dispel stigma of overusing fiscal policy

Given the government's cautious fiscal response to the pandemic so far, it seems unlikely that it will drop the ball on consolidation in the upcoming Budget

Fiscal activism without overstepping into fiscal irresponsibility, seems to be a key policy advice of the Economic Survey. It tries hard to dispel the stigma of overusing fiscal policy, especially during slowdowns, arguing that the resulting growth recovery should allay concerns of debt sustainability. Despite the Survey’s emphatic rebuttal against rating agencies’ outlook for India, it also begrudgingly admits that the ratings as they are currently computed, play an important role in determining portfolio flows. Given the government’s cautious fiscal response to the pandemic so far, it seems unlikely that it will drop the ball on consolidation in the upcoming