Demand-Inducing Stimulus as Covid19 Response: A Case for Debt Monetisation
As India reels from the economic fallout of Covid-19 despite the announcement of a relief package, calls for a more refined and demand-inducing stimulus have emerged. However, the bleak state of the government’s coffers has left limited fiscal space to act. This brief explains the plausibility of financing a demand-inducing stimulus using debt monetisation as a one-time policy measure. Outlining the criticisms against such proposals and how the