The country has enough fiscal resources and monetary space left for intervention and government will pump funds if required to salvage the economy from the COVID pandemic, principal economic adviser Sanjeev Sanyal said on Tuesday.
Sanyal said he expected it to register double digit growth this fiscal and the next unless there is any major disruption.
Infrastructure spending remains the key focal point of India’s strategy with regard to government spending to spur demand. It would like to invest in infrastructure rather than transfer money in the hope of reviving the economy, he said at a business summit here.
Besides, capital spending has multiplier effects.
“We have kept fiscal and monetary space. We will pump (in money) when required (for COVID pandemic). We will ramp it up but through capital expenditure. As even with good revenues, we will have a deficit. We want to keep a large amount of assets for the next generation to serve debts,” Sanyal said at the CII organised East India Summit.
“Infrastructure is the key and central to the strategy for the country in the long term and to come out of the COVID pandemic,” he said.
India has also undertaken several supply side structural reforms besides deregulation.
“We could have pressed the accelerator harder but we remained flexible as we knew it was not a sprint but a marathon. We didn’t opt for a big bang approach of large transfers. What we did is different than many other countries,” Sanyal explained.
Going forward asset monetisation would also a key strategy for the country, he added
