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Why the government is not spending

Given the level of economic decline, it is reasonable to expect the government to significantly increase spending and support economic activity

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Solicitor General Tushar Mehta, appearing for the Centre, said he had sought a meeting with the RBI. The Bench said if the RBI reply ‘goes much beyond the query posed by us, there will be a lot of opinions on it’

Rajesh Kumar New Delhi
The Indian economy is expected to contract by 10.3 per cent in the current financial year, according to the International Monetary Fund (IMF). The Reserve Bank of India (RBI) in its first forecast since the outbreak of the pandemic has projected a contraction of 9.5 per cent. Given the level of economic decline, it is reasonable to expect the government to significantly increase spending and support economic activity. 

The government, however, has refrained from making large fiscal commitments. The economic package worth over Rs 20 trillion announced earlier this year had limited fiscal outgo — that  was rightly focused on providing
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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First Published: Oct 21 2020 | 11:43 PM IST

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