The difficulty in spending

Tax receipts are surging and markets are primed for higher state government deficits, but states are struggling to spend

One can easily spend a few thousand rupees, maybe even a few lakhs, but it is not easy to spend a few thousand crores. More so, if one is a government not geared up for work-from-home, and a raging pandemic keeps most of its staff from attending office for months. This has had consequences: Government consumption in the September 2021 quarter, as measured in gross domestic product (GDP) accounting, was 17 per cent lower than in September 2019 (in real terms). If it had instead grown at the pace seen pre-Covid, the overall GDP would have been 4 per cent