Can Budget 2017 provide a push for growth after demonetisation shock?
There isn't much scope for a fiscal stimulus in the upcoming budget if the government plans to stick to its fiscal consolidation path
In his address to the nation on 31 December, Prime Minister Narendra Modi announced a host of schemes aimed at benefitting the not so rich segments of the population. While it is likely that these announcements have been made with the forthcoming assembly elections in mind, the larger question of how the economy would cope with the deflationary impact of demonetisation has been left unaddressed. Given the fact that there is a broad consensus on the fact that the growth rate of the economy would take a hit due to demonetisation, one would have to wait for the budget to see what the government’s strategy is on this front.
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