Lending, spending... and bending

Bank lending needs to be supported by government spending - the fiscal stimulus

Two off-cycle rate cuts by the Reserve Bank of India (RBI) and a Rs 20 trillion-plus package by the government. Are they enough to fight the impact of Covid-19? While the central bank is willing to do anything to bring back the growth impulse in Asia’s third-largest economy, the government does not want to waste this crisis. It is pushing for reforms.

In many ways, India’s fight against the global pandemic is very different from that in the rest of the world. The fiscal stimulus that has been unleashed by most nations is in the range of mid to high single