HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
Govt to announce steps to revive demand: Sanjeev Sanyal
Jul-10-2020

In order to boost demand, Principal Economic Adviser Sanjeev Sanyal has said the government will undertake measures. He said there is both monetary and fiscal headroom available. He stated that economic activity is steadily getting back on track. He underlined there is lots of monetary space as interest rates are still significantly positive unlike western Europe, where there is zero to negative rates. He indicated that the Reserve Bank of India (RBI) may cut interest rates further as a monetary policy tool to improve demand.

He mentioned ‘we have announced packages along the way and most of the packages so far have really been about cushioning the demand shock. We haven't, so far at least, been going to the rebuild of the demand phase. We will in the future. We do have monetary and fiscal space to do that.’ Besides, he said the government has announced various supply side reforms, including in agriculture and labour.

Pointing out that the post-COVID-19 world will be fundamentally different, he said it will have its own supply chains, geo-politics and changed consumers behaviour. He added ‘so, given all these, as a policymaker, I have to be very very careful not to simply press the accelerator on demand and try and reinflate the world we left behind. So, this is the context in which you will see our policy responses. We have included a lot of supply side measures, which is quite different from many other countries.’

  RELATED NEWS >>