Sample these headlines from the last few days: India’s Gross Domestic Product falls by 23.9% in April-June quarter, its worst-ever contrac...
Sample these headlines from the last few days: India’s Gross Domestic Product falls by 23.9% in April-June quarter, its worst-ever contraction. Fitch Ratings expects India’s GDP growth to contract by 10.5% in Financial Year 2020-’21. Goldman Sachs revises its GDP growth forecast for India from -11.1% earlier to a whopping -14.8%, saying real output in March 2022 will still be 2% below March 2020 levels.
Now read this report from the Indian Express on presentations to Prime Minister Narendra Modi by his Economic Advisory Council, the NITI Aayog – a government think tank – and the Chief Economic Advisor, at the end of June and beginning of July:
“One consistent message in the presentation by EAC, NITI and CEA was the need for a fiscal stimulus and support for the financial system... With almost a dozen Union Cabinet ministers attending these meetings, the participants stepped out with a sense of optimism because they saw it as a signal that the Prime Minister was building consensus within the government for a bigger stimulus... But the government has hardly made any announcements over the last six weeks based on these discussions.”
What explains Modi’s unwillingness to act when all of his top economic advisors made it clear that the Indian economy needs a fiscal stimulus?...
