The debate over RBI’s money printing is pointless without a fiscal stimulus
SummaryRBI has had its liquidity taps open anyway and it’s for the Centre to take a call on fiscal spending
Interestingly, there is a discussion on why the Reserve Bank of India (RBI) should start printing money to revive the economy. Under normal circumstances this would have been scorned at, as this is what led several Latin American nations to their crisis of the 80s. Its supporters, however, aver that such a response would be Keynesian in spirit and would be driven by the government spending the money. Other experts have even been bolder to suggest that RBI should lend money directly to industry. Understandably, tough conditions lead to unconventional thinking, and such ideas are a manifestation of the same.