Government can consider reviewing its fiscal capacity and to stimulate growth and mitigate the effects of high inflation and interest rates. Analyse (200 Words)
Refer - The Hindu
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· The Government’s cautious optimism is with impending concerns of a speedier tightening of monetary policies by the U.S. Federal Reserve and the resultant dip in asset markets.
· Despite excise duty cuts on petrol and diesel, the Ministry believes India’s fiscal math for the year will not unravel thanks to the recent tax levies, and healthy Goods and Services Tax collections.
· Industrial metal prices slipping to 16-month lows, prices for some food items falling off their peaks.
· India’s current account deficit will deteriorate in 2022-23 on account of costlier imports and tepid exports on the merchandise account.
· India’s high import dependence for fuel means oil price trajectories affect most macro parameters, including inflation, growth, current account balances, fiscal management and the rupee.
· And economic policymakers are rightfully concerned about the current account deficit (CAD) widening sharply from the 1.2% of GDP last year.
· The CAD may have hit 2.7% of GDP in the first quarter, some reckon, but if developed economies slow down as expected and shale oil supplies pick up.
· If the fiscal deficit is not a concern, and tax revenues may, in fact, overshoot Budget estimates owing to high inflation, the Government can consider reviewing its fiscal capacity.
K. V. A 2 years
Kindly review
IAS Parliament 2 years
Try to include about inflation rate and more data is required to support your arguments. Keep Writing.
Sathishkumar 2 years
Evaluate sir.
IAS Parliament 2 years
Try to post the answer.
