By Aarushi Singh
GDP figures of
India have experienced a slowdown in recent quarters. This growth slid for the sixth
quarter in a row has hit a three-year
low at 5.7 per cent in the June quarter. According to SBI research
slowdown is real and not technical and called for more public spending to solve
the slide. Research figures depict that this fall in quarter 1 are not
short term or transient.
This note has come after a mention of slowdown
by BJP president Amit Shah. Reports suggest that the government should
consciously expand spending and fiscal deficit, without disturbing the
borrowing.
The
report also points out the 2008 global credit crisis and admits a forward or
upward movement in spending, but was unequivocal in not paying much heed to the
rating agencies. But the present economic
situation requires a fiscal push without chasing the rating upgrade.
The report also suggested that the government
can use a clause in the Fiscal Responsibility and Budget Management Act that
provides for a 0.5 per cent slip in fiscal deficit targets. Further talking
about the borrowings and government sector investment report warned an urgent
check over these factors by moving to short term borrowings.
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