FM’s announcements:Demand has to convert into purchases

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 Demand has to convert into purchases

I am now increasingly of the view that the government actually needs to spend. We may have much lower per capita income than in the developed markets, but as of this point in time, demand looks to be a fairly serious problem. I am just hoping that the capex measures, the loans to state, etc, that have been proposed are actually pushed through and projects started, so that some of the money that is being proposed for the state governments and non-government capex programmes, begins to trickle down into the hands of people.

At this point in time, a large spend would probably outweigh the need for fiscal prudence. However, I do appreciate the need for such prudence and so a partnership with RBI to support the government’s larger borrowing to spend is probably needed at this point.

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