Revamped strategy for India's fiscal architecture in post-pandemic times

India's post-pandemic fiscal architecture should be anchored in debt and be holistic (encompassing Centre and states), dynamic (responsive to changing macro conditions), and conservative

The pandemic upended fiscal dynamics all around the world. The sheer quantum of the shock alongside the realisation in many advanced economies that their fiscal response after the 2008 crisis was initially inadequate and subsequently pro-cyclical, deepening the hysteresis, meant advanced economies went all-in this time. Lacking “exorbitant privilege,” emerging markets were more constrained.

Yet, public debt surged around the world in the pandemic. To be sure, high inflation and catch-up growth of the last few years has partially reversed some of the increase. But, as the dust settles, policymakers must contend with much higher levels of public