NEW DELHI: Severe resource crunch has forced India to limit its fiscal stimulus package, to help mitigate the impact of pandemic-led lockdowns, to less than 1.5% of GDP.
There are now signs are that it may have to cut its capital expenditure to make room emergency spending towards tackling the the covid-19 crisis.
An International Monetary Fund (IMF) note published earlier this month throws some light as to how countries facing financial stress can better manage their public investment spending during the ongoing crisis.
Due to the discretionary and lumpy nature of public investment, governments find it easy to cut back on such investments at a time of resource crunch.