Financing Recovery in the Post-Pandemic Indian Economy

Abhirup Sarkar and Agnirup Sarkar ()
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Abhirup Sarkar: Indian Statistical Institute Kolkata
Agnirup Sarkar: Indian Institute of Technology Guwahati

A chapter in Managing Pandemic and Correcting Development Fundamentals, 2023, pp 49-64 from Springer

Abstract: Abstract The paper looks at the various alternatives of financing economic recovery in India in an environment where output and employment have taken unprecedented hits due to the COVID-19 pandemic. While recovery involves huge expenditure on the part of the government, whether it is incurred on direct transfers or on more indirect means to boost up the economy, the moot question is about its financing. We examine three alternatives: one, monetization of public assets, two, increasing money supply (by lowering interest rates and expanding bank credit), and three, a surge in public borrowing. We conclude that under the present conditions, the only feasible alternative before the government is to adopt an expansionary fiscal policy by increasing public debt.

Keywords: COVID-19 pandemic; Financing; Public borrowing; Money supply; Monetization of public assets (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-19-8680-2_4

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DOI: 10.1007/978-981-19-8680-2_4

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