Rangarajan bats for high govt spending

Hyderabad: In order to drive economic growth, former Reserve Bank of India (RBI) governor C Rangarajan on Friday said that the Centre, in its fiscal policy, should boost expenditure in three categories -- healthcare, providing relief to poor via direct cash and stimulation expenses which includes support to restart businesses and credit guarantee to commercial banks to support MSMEs.

Delivering a lecture on ‘Growth and Policy Coordination in the context of Covid-19’ at ICFAI, he said “Due to Covid-19, the economy has lost two years – one in decline and another to cope up with the decline and there is a need to go back to high growth in 2022.”

He said that in the second half of the year, government expenditures are warranted in a big way to stimulate this growth. Though it looks achievable, uncertainty about the new variant of virus Omicron prevails, he said. tnn