NEW DELHI : Fitch Solutions on Monday said the stimulus 3.0 package recently announced by the Centre to boost the employment , credit and manufacturing sectors would be supportive to India's economic rebound over the coming quarters, however, the actual impact on public finances is difficult to ascertain. "While many of these schemes should be supportive to India's economic rebound over the coming quarters, the actual impact on public finances is difficult to ascertain. For example, the PLIs (Production-Linked Incentive) will span across a five-year period and their fiscal impact will likely only be seen from FY2021/22 onward," an official statement from Fitch Solutions stated. "We maintain our forecast for a central fiscal deficit of 7.8% of GDP in FY2020/21, which already accounts for more central government borrowing than is currently been targeted at ₹13 trillion," Fitch Solutions added. Moreover, the announcement did not outline any additional borrowing to finance these additional spending, which suggests a reallocation of FY2020/21 budget expenditure plans instead," stated Fitch Solutions.

Source: Mint November 16, 2020 08:37 UTC