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Economy

Stimulus sprouts some green shoots of economic recovery. Containing pandemic is vital for growth

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Synopsis
It’s still early to gauge the impact of various government measures on the ground, but there appears to be some sliver of hope. There have been some encouraging figures from sectors that very often behave like weather vanes and give early signals of what lies ahead. A lot will depend on how India battles the pandemic in the months ahead.

An economic stimulus very often works at two different levels. Expansionary fiscal and monetary policies revive demand in the economy, boosting investment and spending by individuals and corporate entities alike. A stimulus also performs another vital function. It lifts business sentiment and unleashes the “animal spirits” in the economy. Business confidence can often drive economic growth. John Maynard Keynes has done seminal work on how