Business Standard

Now is not the time for stimulus

Next fiscal package must await fall in inflation

fiscal stimulus, economy
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illustration: Binay Sinha

T T Ram Mohan
As India struggles to find its way out of a massive economic contraction resulting from a severe lockdown, there are two fundamental questions policymakers face. 

Do we need to stick to the fiscal stimulus of around 2 per cent delivered thus far? And do we stick to the inflation targeting framework that requires inflation to be contained below 6 per cent? The answer to the second question dictates the answer to the first.

Finance ministry officials have said that the government intends to adhere to the enhanced government borrowing target for the fiscal of Rs 12 trillion announced some time ago. This
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

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