The 2023 Economic Survey has leaned in favour of the Centre sticking to the fiscal glide path set out so far. It says being fiscally prudent will “ensure more significant fiscal space for policy action in uncertain times .”
The Survey observes that sticking to fiscal glide path will bring interest rates down and ultimately will lower the cost of capital for sectors across the board and put more money in the hands of people.
The survey said that, “in reality, fiscal discipline translates into a fiscal stimulus for all sections of the economy through lower interest rates.”
According to the survey, “as governments make their fiscal situations sustainable and stick to that path, the risk premium embedded in their interest rates comes down, thus lowering the cost of capital for all sections of society - on their educational loans, housing loans, car loans and business loans – and putting more money in their hands.”
The Survey also makes a strong pitch for Centre to keep incentivising states on capex. It says , “The Centre should continue incentivising the States for reforms and higher capital spending to ensure a stronger General government.”
The capex-led growth strategy will ensure sustainable debt levels in the medium term, the Survey observes.
Also read: India is on the cusp of a growth boom last seen 20 years ago, says CEA | Economic Survey 2023
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