The slowdown and its reversal, that followed government capital expenditure, confirm that the quality of government expenditure creates stimulus even with overall fiscal consolidation. The latter as well as focus on improving vegetable supply chains in the budget enables monetary accommodation, which adds to the stimulus; so do mechanisms to multiply the impact of public funds and use more resources available in a growing economy to create incentives to bring states and private enterprise on board. But an eye needs to be kept on global volatility and compensatory domestic measures taken. Post-pandemic policy demonstrated this capacity. Given the many areas where states have to deliver, formal coordination frameworks may be necessary.
Ashima Goyal (Sat,) studied this question.
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