The stimulus should be monetary, not fiscal

Fight against the last vestiges of inflation threatens to undo significant policy gains of recent years

It is rare for consensus to emerge among hundreds of millions of humans. When it does, like it did in the recent general elections, it is natural for expectations of significant economic change to rise. As prescriptions and hopes turn into predictions, a clamor has arisen for the government to “do something” to address the ongoing economic slowdown.

One must be careful what one wishes for. While there clearly are measures the government can take, a significant fiscal stimulus would be ill-advised, and the solution is monetary.

For several decades now, reports analysing India’s weak manufacturing competitiveness have, in addition