Demonetisation may compel govt to provide stimulus: IndRa

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Finance Minister Arun Jaitley in his Budget on February 1 may have to provide stimulus to the economy reeling under the ‘Tsunami’ of demonetisation, India Ratings and Research said today.

Amidst an uncertain global scenario, the Fitch Group company said that the Indian economy was cruising well till the tsunami of de-legalisation of high denomination currency hit the country.

“…the major dilemma for the finance minister in the Union Budget FY18 is — will a fresh round of fiscal stimulus be required to offset some of the ill effects of the currency de-legalisation,” it said, in a report titled ‘De-legalisation Tsunami May Compel Government to Provide Stimulus in Union Budget FY18’.

India Ratings estimates that GDP growth in the current fiscal will decline to 6.8 per cent from its earlier estimates of 7.8 per cent and “based on the present situation, the adverse impact may flow into 2017-18 too”.

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