The joker in the pack

Government's fiscal headroom is crucially linked to a realistic assessment of its net revenue collection

The Union government’s current thinking seems to suggest that a fiscal stimulus may be announced later in the current financial year. The chief economic advisor (CEA) in the finance ministry told a group of industry leaders last week that the question of a demand-side fiscal stimulus was not of “if” but of “when”. The obvious question is whether the government has the fiscal headroom to announce any such package in the remaining months of the year.

In any debate on fiscal stimulus, one of the key concerns pertains to the extent of slippage in the deficit that such an initiative