Winding down liquidity to be challenge for RBI going forward: Subbarao

Ex-RBI governor says road map for fiscal consolidation starting 2022 would be prudent. Though expansionary fiscal policy is a pressing need, govt spend on health and education would benefit economy

Former Reserve Bank of India (RBI) governor D Subbarao indicated that it could become a challenge for the central bank to wind down liquidity going forward, given the excessive liquidity in the system due to monetary easing.

At an event organised by the Confederation of Indian Industry (CII), Subbarao said that a roadmap for fiscal consolidation starting 2022 would be a prudent move. He said though expansionary fiscal policy is the need of the hour, the government spending on health and education would only be beneficial for the economy. 

He also said that the Centre's fiscal deficit could be double of the