ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Beside the Point

The Economic Survey 2009-10 seeks to promote business confidence and the pet ideas of the finance ministry.

Never mind the real state of the economy; the point is to get the “India Shining” elite all excited and elated. That is what the Economic Surveys of recent years have peddled. The Economic Survey 2009-10 continues in that mould.

It talks of the government’s policymakers as having taken a “calculated risk” in the provision of the fiscal stimulus amidst the global financial and economic crisis. The fact, however, is that they first took recourse to loose monetary policy. But that was like “pushing on a string”, as the good old economics textbooks used to put it, and all attempts to stimulate the economy through easing liquidity did not quite manage to resume the flow of credit. They were then left with little choice in the matter, but took on the fiscal stimulus only after China, the US, and the UK showed the way. In referring to the fiscal stimulus as a “calculated risk”, Indian policymakers are signalling that they intend to get back, as soon as possible, to business-as-usual. However, that will depend on the revival of private investment-cum-elite consumption-driven growth.

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