Bigger debt: Office workers in Mumbai walk past a digital screen showing Indian Finance Minister delivering the budget speech in parliament. Once the pandemic retreats, India might end up with a debt-to-GDP ratio north of 90%, compared to the low seventies at present. — AFP
INDIA’s economy has suffered more than most from the pandemic and so have its people. The country has lost more than a year’s worth of growth and perhaps a decade’s progress in its efforts to reduce poverty.
The economic contraction – the first in India since the 1970s – has put pressure on its government like so many others to respond.
Until this week, that response had been relatively restrained. Prime Minister Narendra Modi’s government seemed to recognise that there was only so much it could do to address the economic contraction, especially while the pandemic is still raging.
By its actions, the government implied that any welfare-promoting and growth-enhancing measures had to stand on a solid macro-economic foundation.
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