- FM’s silence over a fiscal stimulus implies that an increase in public spending may not be on the govt’s agenda
- Spending the entire allocated amounts for various projects early in the fiscal year rather than waiting for the last quarter has been a strategy the govt has been employing whenever it wanted to support growth
The government will front-load capital spending this fiscal year in a bid to support economic growth, finance minister Nirmala Sitharaman said. Speaking to reporters in Guwahati, the minister said the government will come up with more measures to arrest the economic downturn.
Front-loading, or spending the entire allocated amounts for various projects early in the financial year rather than waiting for the last quarter, is typically done to support growth.
However, Sitharaman’s continued silence over a fiscal stimulus implies that big tax cuts or an increase in public spending to counter slowing growth may not be on the government’s agenda. India had slashed central excise duty by 4 percentage points across the board in 2008-09 in response to the economic slowdown that followed the global financial crisis. Due to fiscal constraints, it may not be easy for the government to offer that kind of tax cuts now. Federal indirect tax body, the Goods and Services Tax (GST) Council is scheduled to meet next month but the agenda will be decided closer to the date.
Source: Livemint
