The stance of the Budget is in line with the Economic Survey’s recommendation in using its balance sheet as a counter-cyclical lever to address the economic loss due to the pandemic. Continuing high direct spending is augmented by multiple reforms and other measures to quickly get back to a sustained high growth path. Overall, the Budget is a fine balance between prudent spending to maximise an immediate effect on demand and incentives to attract both domestic and foreign capital.
High-frequency indicators indicate a quicker recovery. However, while GDP recovery has been quick, it is still uneven with parts of the services
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