RAJAN'S AGENDA

The RBI Governor wants the government to bite the bullet on fiscal consolidation.

By ANAND ADHIKARI

It doesn’t happen often. Several experts are advocating that the government should boost public investments instead of pushing ahead with its fiscal consolidation road map. The reason is obvious: a sluggish domestic economy and a global slowdown. Aditya Puri, MD of HDFC Bank, India’s second largest private bank, is advocating a delay in fiscal consolidation. “We have low inflation with negative WPI,” he points out. Concurs Kaku Nakhate , President and country head of Bank of America. “We can live with higher fiscal deficit,” she says. Maintaining the deficit at around 3.9 per cent of GDP, instead of lowering it to the targeted 3.5 per cent, will give the finance minister headroom to increase public spending and also provide an economic stimulus by accepting Seventh Pay Commission recommendations, adds Nakhate. In last…

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Business Today (Digital) - 1 Issue, February 28, 2016

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