India Can’t Spend Its Way Out of a Slowdown
Loose fiscal policy won’t spur the private investment it needs to grow.
Don’t open the fiscal floodgates.
Photographer: Karen Dias/Bloomberg via Getty Images
This weekend, India’s Finance Minister Nirmala Sitharaman will present the national government’s budget — which has traditionally been more than a simple statement of accounts. The budget is also a statement of the government’s policy priorities over its financial year, which starts in April.
This year, India is in the middle of a slowdown in growth that has divided economists and worried politicians. Thus, even more is hoped for from the budget than normal. Sitharaman has spent months meeting interest groups and sectoral representatives, all of whom are hoping that the government is about to come to their rescue.