Government Mulls Extra Rs 500 Billion Spending To Put The Brakes On Economic Slowdown

The government is mulling a plan to loosen its fiscal deficit target so it up can spend up Rs 500 billion to halt the economic slowdown, reported Reuters today (21 September).

The additional spending, according to the Reuters report, is estimated to widen the fiscal deficit for the financial year ending next March to 3.7 per cent of gross domestic product from a budgeted target of 3.2 per cent.

It will reportedly be directed to bank recapitalisation, rural jobs programme and rural housing.

The government had indicated earlier that it may come up with a booster shot for the economy, with the focus on reviving a few sectors. Finance Minister Arun Jaitley had hinted that steps might be taken after consultations with Prime Minister Narendra Modi.

Reviving the economy has clearly been on top of Jaitley’s agenda as he held several meetings this week on halting the slowdown.