MUMBAI : Liquidity is the latest elixir in town. Finance minister Nirmala Sitharaman used the term about 40 times in the five presentations she made to the media between May 13-17 to lay out the ₹20-trillion economic package.
Not surprisingly, a significant portion of the package ( ₹20.97-trillion to be exact) served up liquidity—and not fiscal stimulus as businesses and investors were expecting.
A fiscal stimulus is essentially a scenario where the government cuts taxes or increases spending in trying to revive the economy.
The idea is to put more money in the hands of people, so that they can spend it. In the process, consumer demand and economic growth can be revived.