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Why the govt's economic package cannot be classified as stimulus

Real stimulus would be to tax people less because spending is as much about feeling good, as it is about having the money and depressed people don't go out shopping

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T C A Srinivasa-Raghavan
Is there a danger that the government, seeing the economic revival and the relaxing of tensions with China on the LAC, might become complacent?

I ask because last week, at the time of announcing the third economic package, the finance minister said the stimuli injected by the government so far amounts to 15 per cent of GDP. That’s quite a lot of money, around Rs 30 trillion. Some questions do, however, need answering.

The foremost of these is the government’s definition of stimulus because that term has a specific meaning in economics and most of the steps announced in the
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: Nov 16 2020 | 10:34 AM IST

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