Financial year 2020-21 can be considered a lost year with the first advance estimates released by the statistics office showing a contraction of the real gross domestic product (GDP) by 7.7 per cent, mostly owing to the pandemic. There are, however, signs to suggest that the economy will be able to return to normal on its own in 2021-22 -- as long as liquidity and credit remain available.
But in past crises, the major mistake has been to over-stimulate the economy and to remain engaged in loose monetary and fiscal policy for too long. This mistake must not be repeated by either the finance ministry or by the Reserve Bank of India, the first edit argues. Read it here.
Other views today examine India’s military reorientation, the government’s fiscal choices ahead of the Budget and the consequences of Donald Trump’s supporters attacking the US Capitol on Wednesday.
India is rebalancing its defence forces from the Pakistan-facing west to the China-facing north, a powerful strategic signal that will resonate in Beijing, as well as other capitals. Ajai Shukla describes the process here
US president Donald Trump’s instigation to his supporters to attack Congress will weaken America’s global credibility as a powerful democracy, the second edit says. Read it here
The political economy of fiscal responsibility is usually caught between the binaries of austerity and expansion. Rathin Roy argues here that the economy requires a fiscal battle plan that, in turn, requires an appropriate organising framework.