India's growth slump: No easy answers

Critics of fiscal stimuli cite inflation risks while supporters hail its role in economic revival

“We should be very careful lest fiscal actions undercut macroeconomic stability,” said Reserve Bank of India (RBI) Governor, Urjit Patel, in response to a journalist’s query on fiscal stimulus packages during the monetary policy conference on October 2017. The Prime Minister’s Economic Advisory Council (PMEAC) has also recently expressed its reservations about a mid-term fiscal stimulus package by the government to revive India’s economic growth. 

While critics of a fiscal stimulus cite macroeconomic stability -- most notably upside inflation risks -- as a key reason against a fiscal stimulus, advocates routinely talk about the famed fiscal multiplier