Public spending the only channel for Centre to revive growth

Capex to remain within means as fiscal deficit remains a tough climb; PSUs told to contribute

To revive economic growth after it crashed to its lowest level in Narendra Modi’s tenure as prime minister, the Centre has just one recourse — higher public spending.

However, there are likely to be limits to that as well, in the face of a ‘tough’ fiscal deficit target of 3.2 per cent of gross domestic product, officials say. Analysts and experts believe, on the other hand, that just spending within means won't be enough and that the centre should boost public expenditure over fiscal discipline.

The fiscal deficit data available so far, for April-July, show that the difference between expenditure