HDFC’s Parekh bats for stimulus package

Deepak Parekh

Deepak Parekh   | Photo Credit: KAMAL NARANG

‘Slight rise in fiscal deficit target okay’

There is a need for the government to announce a stimulus package, according to Deepak Parekh, the chairman of Housing Development and Finance Corporation, the country’s largest mortgage financier.

“In unusual times, as we are in right now, fiscal and monetary policy tools need to be accelerated in a timely, yet prudent manner,” Mr. Parekh said during a speech at the S.P. Jain Institute of Management and Research.

“There is a consensus that a slight increase in the fiscal deficit target can be accommodated as long as it stimulates growth,” he added.

The government had already announced sharp cuts in the corporate tax rate that would cost the exchequer ₹1.45 lah crore.

Mr. Parekh said lower revenues due to the cut in corporate tax rates and lower GST collections could be compensated for with more aggressive disinvestment plans and increased payouts by the Reserve Bank of India (RBI).

He said the country would become a $5-trillion economy, as envisaged by the government, certainly by 2025, if not 2024.

“If India’s economy isn’t $ 5 trillion by 2024 as envisaged by the government, it will certainly achieve it a year later. Let’s be clear — the question is not whether India will become a $5 trillion economy, but how soon it can attain this goal.”

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Printable version | Jun 3, 2020 8:33:37 PM |

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