Economic Survey 2020-2021 proposes debt-financed fiscal spending to be the driver of growth. Examine the basis of this argument and the risks involved. 10 marks

Mentor’s comment-
  • In the intro, mention India’s fiscal deficit for FY2020-21.
  • In the body, mention Oliver Blanchard’s argument for the higher multiplier effect of government spending in the recession and condition for sustainability of the government debt-difference between growth rate and interest rate of the debt to e positive.
  • Conclude by mentioning the contradiction between government policy and the fiscal regime it is running.
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3 years ago

order no- #0000392548
please review

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