'Fiscal discipline translates to stimulus'

The fiscal discipline followed by the government lowers the cost of capital for all sections of society, freeing up resources for a future stimulus, according to the Economic Survey 2022-23 tabled in Parliament by finance minister Nirmala Sitharaman.

- Gireesh Chandra Prasad

The survey, a review of the economy and its management, also said the government's "robust capital expenditure" could bring back the industry's animal spirits, with early signs of private investment rebound already visible. State governments too have improved their finances after the pandemic, staying within their borrowing limits in the last three years.

"It is possible to imagine fiscal discipline turning into fiscal stimulus in future, as it would bring down the government's cost of borrowing, lowering the present high share of interest payments in public expenditure and making more money available for economic development and social welfare," chief economic advisor V. Anantha Nageswaran said in his preface to the survey.

The survey said the Centre's fiscal glide path will ensure more fiscal space for policy action in uncertain times.