Govt must focus on demand-side measure: India Ratings

by Nidhi Bhati

India Ratings and Research (Ind-Ra) expects Budget 2021 to focus on resolving the demand-side issues. The rating agency warned that even if the supply-side bottlenecks get restored on account of various government measures it may soon run into difficulties due to the lack of adequate demand for goods and services. The absence of adequate demand may jeopardise the recovery and may even lead to a second-round impact. To increase the demand side measures in the upcoming Budget, Ind-Ra suggested that the government must focus on spending on infrastructure, setting of development financial institutions and prioritise its expenditure by discontinuation of schemes/sub-schemes that have meagre resource allocation and are non-impactful.