Read the following case study paragraph carefully and answer the questions on the
basis of the same.
Prime Minister Narendra Modi’s second budget in seven months disapppointed
investors who were hoping for big-bang stimulus to revive growth in Asia’s third largest
economy.The fiscal plan delivered by Finance Minister Nirmala Sitharaman proposed tax
reductions for individuals and wider deficit targets,but failed to provide specific steps to
fix a struggling financial sector,improve infrastructure and create jobs. Stocks
slumped,reflecting the subdued sentiment.
“Far from being a game changer, the budget provides little in terms of short –term
growth stimulus,” said Priyanka Kishore ,head of India and South-East Asia economics at
Oxford Economics Ltd. in Singapore. “While income tax cuts will provide relief on the
consumption front , multipier effect is low and the overall stance of the Budget is not
expansionary.”The focus now shifts to the Reserve Bank of India’s interest rate decision
on February 6,2020. However ,having already cut interest rate five times last year and
with inflation exceeding 7 per cent,well above the central bank’s target, there’s limited
scope for Governer Shaktikanta Das to ease more.
Answers
Answer:
Read the following case study paragraph carefully and answer the questions on the
basis of the same.
Prime Minister Narendra Modi’s second budget in seven months disapppointed
investors who were hoping for big-bang stimulus to revive growth in Asia’s third largest
economy.The fiscal plan delivered by Finance Minister Nirmala Sitharaman proposed tax
reductions for individuals and wider deficit targets,but failed to provide specific steps to
fix a struggling financial sector,improve infrastructure and create jobs. Stocks
slumped,reflecting the subdued sentiment.
“Far from being a game changer, the budget provides little in terms of short –term
growth stimulus,” said Priyanka Kishore ,head of India and South-East Asia economics at
Oxford Economics Ltd. in Singapore. “While income tax cuts will provide relief on the
consumption front , multipier effect is low and the overall stance of the Budget is not
expansionary.”The focus now shifts to the Reserve Bank of India’s interest rate decision
on February 6,2020. However ,having already cut interest rate five times last year and
with inflation exceeding 7 per cent,well above the central bank’s target, there’s limited
scope for Governer Shaktikanta Das to ease more.
Explanation:
overall stance of the Budget is not
expansionary.”The focus now shifts to the Reserve Bank of India’s interest rate decision
on February 6,2020. However ,having already cut interest rate five times last year and
with inflation exceeding 7 per cent,well above the central bank’s target, there’s limited
scope for Governer Shaktikanta Das to ease more.