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An active fiscal policy can ensure the full benefit of seminal economic reforms. Pixabay

India requires an active fiscal policy that will ensure accrual of overall benefits from the Centre’s seminal economic reforms, said Economic Survey 2020-21 on Friday. The survey document which was tabled by Finance Minister Nirmala Sitharaman in the Parliament cited fiscal multipliers are disproportionately higher during periods of economic crises than booms.

“Thus, as the Covid-19 pandemic has created a significant negative shock to demand, an active fiscal policy can ensure the full benefit of seminal economic reforms taken by the government,” the survey said.


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“As the IRGD is expected to be negative in the foreseeable future, a fiscal policy that provides an impetus to growth will lead to lower, not higher, debt-to-GDP ratios.”

The Economic Survey examined the optimal stance of fiscal policy in India during a crisis and concluded that it is growth that leads to debt sustainability and not necessarily vice-versa. Besides, the survey noted that the phenomenon of a negative IRGD in India, unlike advanced economies, is not due to lower interest rates but much higher growth rates.


The trend has prompted a debate on the saliency of fiscal policy. Pixabay

Consequently, the trend has prompted a debate on the saliency of fiscal policy, especially during growth slowdowns and economic crises. According to the survey, simulations were undertaken till 2030 highlight that, given India’s growth potential, debt sustainability is unlikely to be a problem even in the worst-case scenarios.

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The survey highlighted that a well-designed expansionary fiscal policy stance can contribute to better economic outcomes as it can boost potential growth with multi-year public investment packages that raise productivity and mitigate the risk of the Indian economy falling into a low wage-growth trap, like Japan.

In addition, it pointed out that a time of excessive risk aversion in the private sector, as seen during an economic crisis, risk-taking via public investment can catalyze private investment, leading to crowding in, then crowding out. (IANS)


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Actress Urvashi Rautela has recently announced the name of her next film which is titled 'Dil Hai Gray'.

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Urvashi shares: "I am excited to announce the title of my next film 'Dil Hai Gray' on the auspicious day of Vijaya Dashami. The film is very close to my heart and it was lovely working with director Susi Ganeshan sir, producer M Ramesh Reddy sir, and my co-stars Vineet Kumar Singh and Akshay Oberoi. "

"The film has created a massive response in the south industry and I am very positive about the story that it will be also be loved by the audience here. I hope my fans would bless us with their love and support. Super excited to watch my film on the big screen after a long time," she concludes. (IANS/ MBI)


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Everything in life is temporary. The only constant in life is change itself. That is a reality that we cannot deny. The beauty of this fact is that it allows us to confront our fears, trust the magic of the moment, and enjoy the precious gift of life. What lasts forever is our true self -- the real you -- the person you were born to be. If you feel stuck, trapped, boring or insecure -- acknowledge yourself, find yourself and who you really are on the inside. Your shiny sexy brilliant self is there. It's been there all along. You just need to unveil it.

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