Analysing Union Budget 2022-23: Fiscal Policy and Global Uncertainties

Chakraborty, Lekha S (2022): Analysing Union Budget 2022-23: Fiscal Policy and Global Uncertainties.

Abstract

Against the backdrop of mounting geopolitical risks and inflationary pressures, if RBI will hike the policy rates, the growth recovery process may slow down. At the same time, keeping the policy rates status quo for prolonged period could catalyse the de-anchoring of inflationary expectations. The union budget 2022-23 has accommodated high fiscal deficits and has emphasised on “crowding-in” effects of public infrastructure investment. The intensity of global macroeconomic uncertainties on economic recovery in India can be lessened through sustainable fiscal and monetary policy co-ordination.

• Item Type: MPRA Paper
• Language: English
• Keywords: Budget, Inflation, Fiscal Policy , Monetary Policy , Green Bonds , Global Uncertainties
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents; H - Public Economics > H6 - National Budget, Deficit, and Debt

References

Blanchard, Olivier, (2019). “Public Debt and Low Interest Rates,” American Economic Review, Vol 109, No 4, pp 1197–1229.

Chakraborty, Lekha (2016). Fiscal Consolidation, Budget Deficits and the Macroeconomy, New Delhi: Sage Publications.

Chakraborty, Lekha (2021). “The Macroeconomic Framework of Union Budget 2021-22”, Economic and Political weekly, March 2021.

Chakraborty, Lekha (2021a). “Is Climate change a fiscal or monetary policy challenge?” published in Multiplier Effect, Levy Economics Institute of Bard College, New York, November 10, 2021.

Chakraborty, Lekha (2022). “High Deficit is the new Growth Mantra”, The New Indian Express, February 2, 2022.

Chakraborty, Lekha et al (2020). “Budget Credibility of Subnational Governments: Analysing the Fiscal Forecasting Errors of 28 States in India,” Working Paper 964, The Levy Economics Institute, New York.

Government of India, (2022). “The Union Budget Documents 2022,” Ministry of Finance, New Delhi.

Hansen,Lars peter, (2022). “Central banking challenges posed by uncertain climate change and natural disasters”, Journal of Monetary Economics, 2022.

RBI (2022). “Monetary Policy Statement, 2020–21: Resolution of the Monetary Policy Committee (MPC), 8-10 February 2022,” Press Release, 24 February 2022, Reserve Bank of India, Mumbai.

Roubini, (2022).”Russia’s War and Global Economy”, Project Syndicate, February 25 2022.

Singh, N K (2022). “The budget’s balance”, The Indian Express, February 3, 2022.

Stiglitz Joseph and Hamid Rashid (2020). “Which Economic Stimulus Works?” Project Syndicate, 8 June, 2020.

Vinod, H, H Karun and L Chakraborty (2020): “Encouraging Private Corporate Investment in India,” Handbook of Statistics, H Vinod and C R Rao (eds), Chapter 5, Financial, Macro and Micro Econometrics Using R, Vol 42, North Holland: Elsevier, pp 155–83.