Economists at State Bank Research also warned that any attempt to trim government spending to maintain the fiscal numbers will be severely detrimental to growth.
Lose-monetary policy alone cannot arrest the deepening slump, instead government must take demand-boosting measures, especially in rural areas, by frontloading expenditure primarily through the national rural employment scheme, says a report.
Economists at State Bank Research Monday also warned that any attempt to trim government spending to maintain the fiscal numbers will be severely detrimental to growth.
“The current slowdown cannot be tackled by monetary policy in isolation. The government must address demand weakness by continuing to meaningfully frontload expenditure say through MGNREGA and PM-Kisan,” the report said.
The PM-Kisan portal shows the number of beneficiaries under the scheme is only 6.89 crore against the target of 14.6 crore due to slow validation in farmer data. This has to be speeded up to boost rural demand, the report said.
Data from the MGNREGA website show that against total release from the Centre of Rs 45,903 crore (till September 13), total spend is around 73% only or Rs 33,420 crore.
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