The Fight Gets Real ; the Global Crisis has Spilled From the International Financial System Into the Real Sector. Here's What the Upa Government's Game Plan for Dealing with It Is Looking Like at the Moment.

Summary

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A meeting, chaired by Finance Minister P. Chidambaram, on October 29 in Delhi deliberated on India's strategy for minimising the impact of the global economic downturn on India. It recognised the touch points where the impact is being, and will soon be, felt and the potential remedial course. The meeting also raised some critical questions, leaving them unanswered for now.

On fiscal policy The UPA Government is weighing the option of amending the Fiscal Responsibility and Budget Management (FRBM) Act to free itself of the worries and the compulsionof limiting its overspend over income. The question is: should the FRBM Act be amended to provide counter-cyclical stimulus using fiscal policy? This was precisely what was discussed between the key Indian policy makers. The Act mandates a reduction in fiscal deficit to 3 per cent of the GDP by March 2009. A consensus on this relaxation is yet to be arrived at.

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Extract

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The Fight Gets Real ; the Global Crisis has Spilled From the International Financial System Into the Real Sector. Here's What the Upa Government's Game Plan for Dealing with It Is Looking Like at the Moment.

On financial markets The to-do list emerging from the meeting includes increasing dollar liquidity for firms, giv...

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