Policy balance
The recent appointment of Sanjay Malhotra as Governor of the Reserve Bank of India (RBI), replacing Shaktikanta Das, signals a pivotal shift in India’s monetary policy dynamics.
Days after Finance Minister Nirmala Sitharaman indicated that a further economic stimulus is not off the table, Secretary, Economic Affairs, Tarun Bajaj on Wednesday said the Centre is open for further measures to boost the economy.
Participating at a CII event, he said that the government has received suggestions from various ministries and sectors on the needed measures.
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Bajaj also said that while preparing the next Union Budget, the government would be looking at expenditure for this year and the requirements of various ministries.
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“We have been pushing government departments to undertake capital expenditure to create a multiplier effect in the economy. We will allocate more money for capital expenditure wherever necessary in our revised estimates too,” he said.
The senior official’s statement comes after Finance Minister Nirmala Sitharaman on Monday said that the Centre has not closed the option for another stimulus package.
On October 12, the Finance Minister announced a number of measures to induce government employees to spend in the upcoming festive season, including a ‘LTC Cash Voucher Scheme’ and a ‘Special Festival Advance Scheme’.
In May, the government came up with the much talked-about Rs 20 lakh crore ‘Aatmanirbhar Bharat’ economic package. Both the rounds of stimulus so far have received flak along with appreciation from the industry and experts, as many are of the opinion that they are inadequate, more so in terms of boosting demand.
A recent Moody’s report said that that the second round of fiscal stimulus amounts to just 0.2 per cent of the country’s real GDP forecast for the financial year 2021 and in total, the two rounds of stimulus bring the government’s direct spending on coronavirus-related fiscal support to just around 1.2 per cent of GDP.
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