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Budget should maximise capex, set stage for MPC to control inflation

Budget 2022: ICRA expects a satus quo on the stance of the monetary policy as well as the reverse repo rate in the upcoming meeting of the Monetary Policy Committee.

ICRA, Aditi Nayar
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Aditi Nayar
The Union Budget 2022 is being finalised amidst the third wave of Covid-19 in India. In our view, it should focus on maximising capital spending to inject durability into the economic growth outlook, with the rebound in global commodity prices portending that the Monetary Policy Committee (MPC) will have to prioritise inflation management in FY23. 

Encouragingly, the quarterly data suggests a modest broad-basing of the economic recovery in Q3 FY22, with a larger number of high frequency indicators bettering their respective pre-Covid volumes. However, the onset of the third wave of Covid-19 has subsequently triggered state-wise restrictions. These have expectedly

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First Published: Jan 27 2022 | 9:17 AM IST

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