“Therefore, the ripple effect of de-legalisation is proving to be quite disruptive for the overall economic activity and employment,” India Ratings said.
It further said as the government embarks on preparing the budget, “the central question before it is – whether a fresh round of fiscal stimulus is required to offset some of the ill effects of currency de-legalisation”.
According to the agency, Indian public finances (central, state and local bodies) suffer from committed expenditure syndrome as a large part of current expenditure is inflexible and cannot be reduced/curtailed in the short-run.
