Business Standard

Income volatility: The new gorilla in the room

The consumption problem is one of high volatility in incomes

Image
Premium

T C A Srinivasa-Raghavan
As the economy begins to recover, the government has to decide on a stable medium-term investment and consumption policy. So far it has been focusing on reviving output. That approach may now have reached its limits. There isn’t much more to be done, except by way of new investment.

But, along with production and investment, consumption, too, needs to be revived. This is a much more difficult proposition, made all the more so by the absence of a theoretical underpinning or framework.

All we have now is the plain vanilla Keynesianism of the “let them have money”. But that’s the equivalent of
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Mar 26 2021 | 11:32 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com