Fiscal policy reset needed, especially after a difficult Covid phase

Government intervention during the pandemic seemed conscious of the fact that India's fiscal position was not very strong at the beginning of the crisis

The first Budget of the third Narendra Modi government is expected to present the medium-term roadmap for the Indian economy. While the message from the top is that of continuity, structural shifts will be required in some areas. One such key area is the conduct of fiscal policy.

Fiscal backdrop

The last term of the government was perhaps the most difficult in recent memory for fiscal management because of the pandemic-related disruptions. However, after a contraction in the pandemic year, the Indian economy recovered quickly and has been growing at an annual rate of 7 per cent or more.

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