{"id":67014,"date":"2020-10-21T18:15:30","date_gmt":"2020-10-21T12:45:30","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=67014"},"modified":"2020-10-21T18:15:30","modified_gmt":"2020-10-21T12:45:30","slug":"fiscal-expansion-response","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/fiscal-expansion-response\/","title":{"rendered":"Fiscal Expansion Response"},"content":{"rendered":"<h2><strong>What are the Components of fiscal expansion?<\/strong><\/h2>\n<ul>\n<li><strong>The non-discretionary automatic stabilizers<\/strong>: Automatic stabilizers are ongoing government policies that automatically adjust tax rates and transfer payments in a manner that is intended to stabilize incomes, consumption, and business spending over the business cycle.<\/li>\n<li><strong>The discretionary fiscal impulse:<\/strong> Actions taken in response to changes in the economy. These acts do not follow a strict set of rules, rather, they use subjective judgment to treat each situation in unique manner. Examples may include passing a new spending bill that promotes a certain cause, such as green technology.<\/li>\n<\/ul>\n<p><strong>How was India\u2019s fiscal policy response to revive economic contraction?<\/strong><\/p>\n<ul>\n<li>Discretionary fiscal impulse in India has been only a modest 1.8% of GDP.<\/li>\n<li>Most of the fiscal expansion this year is likely to come from a decline in tax collections and other types of automatic stabilizers, rather than government action.<\/li>\n<li>In comparison, almost 60% of the fiscal expansion in emerging markets has come from discretionary policy<\/li>\n<li>India\u2019s fiscal response has been more of \u201cbelow the line&#8221; measures through credit guarantees, payroll support, equity infusion and special liquidity schemes.<\/li>\n<li>\u201cBelow the line&#8221; fiscal support amounts to 5.2% of GDP. In this, India resembles advanced economies rather than its emerging markets peers.<\/li>\n<\/ul>\n<p><strong>Why India has emphasised to spend low on discretionary spending?<\/strong><\/p>\n<ul>\n<li>During the crisis India\u2019s Fiscal strength was far less than other major economies.<\/li>\n<li>Fear of sovereign credit-rating downgrade, in case the fiscal situation deteriorates further.<\/li>\n<li>Prevalence of high inflation, which means that a demand stimulus during a severe supply shock would have added to price pressures.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What are the Components of fiscal expansion? The non-discretionary automatic stabilizers: Automatic stabilizers are ongoing government policies that automatically adjust tax rates and transfer payments in a manner that is intended to stabilize incomes, consumption, and business spending over the business cycle. The discretionary fiscal impulse: Actions taken in response to changes in the economy.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/fiscal-expansion-response\/\">Continue reading <span class=\"screen-reader-text\">Fiscal Expansion Response<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-67014","post","type-post","status-publish","format-standard","hentry","category-public","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704791809},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/67014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=67014"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/67014\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=67014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=67014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=67014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}