Centre for Development Economics
Department of Economics, Delhi School of Economics


Post Covid-19: Recovering and Sustaining India’s Growth


Ashima Goyal


Thursday, 30 July 2020 at 3:00 P.M.



The paper discusses past virtuous growth cycles in India and argues that the post Covid-19 macro-financial package is an opportunity to trigger another such cycle, by raising marginal propensities to spend above those to save. It is feasible since the major constraints that aborted such cycles in the past are waning. Among these constraints are commodity price shocks and other supply-side bottlenecks; financial repression, mono-culture and discretionary allocation; and fiscal space. While the first is relieved, and there is adequate progress on the others, fiscal space is still constrained. Even so, the Covid-19 crisis necessitates a large macroeconomic stimulus. In order not to overstrain government finances it should be targeted, temporary, and self-limiting. Financing features can aid this, as well as improve financial stability. Large government assets can be monetized to help restructure towards more effective government spending. Specific policy implications are drawn out.

All are cordially invited

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