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Government may pump $7.7 billion to revive economy; experts express caution

With red flags showing in the economy and with a possibility that it may impact the next general elections, the government is planning to inject additional funds to revive the economy. Although nothing has been announced officially, top level sources in the government said that there may be plans to pump an additional 5 lakh crore in the economy to revive it. Five lakh crore is close to $7.7 billion, which is a massive amount to spend in a single year. However, such additional funds could derail the government’s original plan to reduce the fiscal deficit and bring it to a decade-low of 3.2 percent of the GDP. Nonetheless, difficult times ask for difficult decisions and an increase in public spending may just be the medicine needed to revive the economy.

However, economists have warned the government against choosing quick fixes, since it will negate all the good work done till now. Economists have advised the government to be patient. They reminded that a stimulus package was announced earlier by the then finance minister Pranab Mukherjee after the 2008 downturn. However, it caused more damage than work in favor of the economy. Economists said that the government should not repeat the same mistake by launching a stimulus package to revive the economy. However, it is also true that the government just cannot afford to sit idle when the GDP growth is slowing down. It has to do something now; something that works and can revive the economy.

About Satya Singh

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