EY India Chief Policy Advisor DK Srivastava said the economy was passing through a phase of investment slowdown, and demonetisation drive has also led to consumption slowdown.
“The authorities are aware of this and they might come up with a fiscal stimulus programme for next fiscal.
Government will get additional room for spending as extra resources to the tune of 1.5 per cent of GDP, or Rs 2.2 lakh crore, garnered by dealing with old money and tax collection from unaccounted deposits would be enough to stimulate the economy,” Srivastava said.
The stimulus can come in the form of additional spending in road, railways, and other construction sector which will have a multiplier effect on jobs, he added.
Listing three major challenges that need to be watched, experts said the effects of demonetisation could last till March-end before it stabilises. Besides, global developments and GST rollout would also be keenly watched.
