DEBOPRIyo Roy

MBA20b44.

wo
.Montany and Hiscal poliu'es in a ountry mu

mawweonmic
Stabilíaion tvols. Fuxi ble vigilant
and igilant

w i alow wunry to
tiscal and monutany poli am

hold uonomic stabiliiahion .

Honsta poliz is otten

inttahen to
mued to auhire Hhe obuhive e Low

shocks
stebilize he eonont trom output and pn'e
brasedtowands
ú qtun
On h e thta hand Hiical poly
even a m e cost of niqlen
hig qowth and eploymunt
inlamon

Role o Honetavy andl fiscal Poliu in lnslia

well
Due to qlobal rutsion, enona* of dia sulued as

The ontaminahon Yem tobol Hinanual

wisis mcguured
Sutada monetary and Hscal pouu changes tu enbu
The govB . had
enouan liquidit in the eLonou
Theae. an
intodund twu iscal stimuuus pauages .

expandad s a t - Mt poaram t r ruralPoor +he tam

Also Riseave bark
0aun wauvu poaluage ad pagout.
wed oher range monetary arrangewunts t r uudity
mangenmuvr Suuh as Cah Resewe Roah'u CCRR) wls th was

to 5 t'n Ju 1009 fom 97. in August 2008,

redud
Stakuory uquudu t t Rho(SLR) shp utahon and Open

Market opuaho (0M) ee.

 pandemi'C ludian
Lookang nto the impant e coID 11 on
-

euonomy u n t ameomunts by vouuious analy sts

Aove

Sigitiant
owua india's qrowHh prospeuts tor f Y24.
chronic invwtmut swuwdoun
Jhduan uonouy Sutus trom a

on uuhiuh an a t e baakdoun ouonomic auhviwes Gas

bun ovulaid du to lochdoun

scBs astinlus paukages Aawe bun announca
foun major
sinu the andl ol March

shiuls L RBI lowud rupo ake to q4t7

A. Monetavy
dpun to 3 0. .Sewual uguidi+
CRR aloo bvug
enhan u na meADus une anno unad.

B. Fiscal sthulws l: q oven announed unnomic velie

pauage o 1+ lach urove und PM Ganb halyan 7ojana

C. frscal skinulo L Finante Hini'stur anno unud stiuuulus

in 5 trandhes wch toqtten auounteod to |l:62

paskoge
akh crors

RGT annpunud anoHn yeduuhon in

D. Molan sHnulus
Oher rdyant rees
repo rate to
histon'c o 41 .

rore, MF rae
Suwh aa rwne repo rate banh

wne abo Lowuud

 suuh avianon,
Sutors hot houe ban hit badly as

ohews shoutod Le
towusm, hwspi kal amon may
pnontud in upoming budge Also spands ing on

health smoutd be pnimar to The nex+ budgtt

i set to be a
major chalunge for e o v t . uluch
anadt shuggui s o qovt. han to cut wrnus by

poskponing ow pnontt spending India muot ouns

now on ihatauhng the euonomt a n by towmna

on invastruutunee and retomo

b) Cowduu'ng Jhe impat af coviD-11 tous nmust be
run tor (nuome mauntanune o hns indud
Bouial seun. walae, namploy ment copenaton
Boual

The ane ntaun txamplis non disceiouary

Hisal polra Pa nt tov
o n e suuh
unumploment ben'hts
typíLaL exampls. Dumng reion thewe2
patmans inuaDe Thue aa
qovunmunt spendsing
schumus in
many
man ountn that
auBomahHcot tnyeo
more dunng reeanons
Eun when the
dudes to nat dp
any Huing
gouumant
hee ave
awe aa lounfer
ucat Hscal input. This s ountu
hat d not Hsca polr ooutome
wome
rt on aone's
calld non dismhon uhch
dischon uueh ioi
disuhonar istal
hstad poli
poliy
. I n ne giuun qurhon
Pnce Lu.
Quanhty dmandid Quanhty Supplred
0S
2500
S00
0.35
3000

3500
3500
4000 25
3000

25 00 4500 5

95 SKAS

uilrbriun

0 79

05
AD
0-25

2000 2500 3000 5 o 4p0D 4500 5DO0 S500

S00 1o00 1500

Raal 4DP

ehort- run
HeL ue drru the oarrgote dumand and.
in the snor nun
Equil'brruwn
49 Supply unve.

is the pmiu quanHt Pam uhu agqate dunand á

u a l to
caual rae supl b r ou quubtion

me quli brium quanh : 9500 at pnu luu o L.

AD wve do unwand sopina, wuhna 2RA S Cuve w

upwoad slopt
(6) dumand woud inasase ulan qovun mut
The ggregale
spendn inunased
w ds ane in uaned shet run
Also ukun produuhon
would aloo nuae
a0r e suppy
woth f5d0.
qtuun iscal stimuus paskage
S00.
AD, SRS inases b

Nw ADAs r-pw
Pnia u u l
u a n h dumandd uanhty Supplred
3000
5bDO D 3S
3500
4500
4000
25
4500
3500 5
5000
3 DOO

E Enew
0:9

0-5f

Real 4DP
 e 9Yaph both AD and AS wwe
As an su twm
and AS. AHso
gtoukwands o new posttbws ADI
touwando nghktwm
2guilrbnum posikron swlts '5d
£ to Enw Hue pnu u is sHll same i.P. '
50
but quanhi u inuuaned b
wo ud rwive he shps
k euonomy
CYe 1 do believe conuneo
wdutallw Tue stps au prinmani
a

pm Cavel
tn uilibriumkeing
w hagi
iuanínquaniby Sbo
wwohant but
ave ban aetuhive He v«

Thi woud not dand or spply

qovttmed
ov
to dhage upn 9gregcke
bom AD and ts uh is buuaor
Tur thanged more
tax reduhon would onuowape
th ple
peopla to inst
qiuen,
C100t0 651d
I:20o0- B0oi

200

T 20+020Y

r40
expots ) 30

M
ld+ 0 52Y
Ms 70
15b0t
150-

M 0 SY, Msp

G+ 9r
spendiug
qovunmen 200+40

240

Now ®+0-10Y))
(Y- (
C l 0 0 +065
8o)]|
el00+
0:45 Y+ 0:20 tE
D o + 0.65
(08Y-so
C
0'52Y-
52

C 10o +

C 48+ 0 52Y

At quilubrium
X- M
-

my+ Gr
YC+1+ 4 +

30DT + 200 t30 o+0'5) y) +40

-> y 4 8 +0°52Y t
200-

4 8 + 0 52Y + 200- 300í+ 200 + 3 0 - 1 0 - 0'52Y +4D

 7y 48 t 2oo+200 +30 2300- I0 + 0'529- b'524 40

Y 420t 48-3bot+ 40
Y 5b8- 3DD

19 ah'on Y 508 300

LM euatonw maslut)

Mpn demanded nouay Supplied

M+MspP Ms

0-5Y+50- 15bot Ms
M1s

1500i 1o
0 5Y+ 150-
O'5Y-1500 20

20 +15b0
7 0 5Y
Y 4 0 * 306o

LM uuahon Y 40+ 3000 L -

and iome wel 7.
bTo aluulae tnr roale "i
the 1s LM

mauuet at eguibri um
aoodo w a a l nOw

508-300 404b00t

469 30D
7
469/9300

0 14l8 -
 'n IS eguahon
Subshhing

Y 508-3oo o-1418)

Y 4b5 46.

a dbolished
c hn taxes

D 0-b5 Y+ 2o0- 300t+ 240 + 30-l0+0-62Y

Y +
300t
20O + 240+ 30 16+ 0:65 Y -o:S5y -
Y Jb0 +

0'12Y- 300t
560 t
Y
84Y a 560- 300
0 0
Y
Y b43 b -344 82

CaLtulatng

643:64- 344 82 40 + 3oo0

>
3 o 0 o + 3 4 4 82T
76436 40

3342 82
603 6

01864
when taxes one abol1shed iutuo
and E 7
Cowpaung Inuome
inuse and albo k e goods n a u t
rates
wtu

e l would conoegLny damao

Subshtuhn 1s equahon
y Su- 20001&o4)
Y 4 5 3 . &8
 DEBOPRIyo RoY
MBAODH.

Giuun in Hhe case,

20b millien
invatmunt in o11

i'nveshment in orv =
3od milli'on

MPC 0 40
in
h a t total inneabe
( m ot Kunes wultipliu investment
inmase in iaveatmcnt
income is manitod hL onginal
illien
invetmunts in 2019 was f20o
g i u n giun case an
million hunu it showS
and in 20 20 iE is 00 ,

million. Gut inuome vsb

wiL not is by
inuease 100
it.
1Do million buta multipte o
undukakes
ut us supose aovanmnt
To explan Hus etut
some public wo Yus , mabe
expendiBue on
invemnt

hawe to po waq to
Cwwstuhen of road. Fov Huis Huy
to H

he tubonrs engaged, prius o makesial uho vesAAsA

So now pople
otau expnwes.
Supplin and
million ambug
ham wouud spend a
g oco
this 10b
9 r u maginat po pewait
pat on wusuunn goods
tota 4 vo millian
0+Or t0./ . , i.e. 707. a he
illibn
on oedo.
wwpunn
So out e 7o
spEnF
tonsuumu qvodis it would tnuane Hne
spanon
inuema opeoplu who spply Hhuwe conduumun aocdis

wo th t o million,
 wouRd
psople usho ruue Hae omillion
agomn
Hgan
and t e valu
spen d 40. ot it on tousumn ogoods
ousuump-hon
eLps on inuteasing In w way ckaun a
would o
expendihe woutd o n i u e and
incoma peopla

on inLA In

(b) yiun. MPe dulins trom 04 to 0b

L
nouo, AY A1 MPC
inome
AY inuease in
million
A1 nuabe in i n v h t n t floo

MPemmgina propana ik
333-33
millie
aes
For MPe 0 4 A9= 1DD ¥-o:4 250

for MPC Db AY 1oD

0 b
trm 0.+ to
hene uuben MPe diuases
Can see
As
As
23
in i n o v e albo drops troun333
06 he change
umen
Huat Lwen
million 5 d milion. Ts siqnita
goods and wove portion
sp ent
on wwsumu
u
amoun
is we tov tavtng S s u u t h amounF Spen ou

Dwun goods , chan owowmphon expand1 tun talus

a hit ond uuhwmMat nuome aE popli would dAuaase .

(C) Dung OViD, peopl spun

LD dh ouaumn qbods as MPe
deln aund ptople stowHng gav in moe, wme
canae in nahonal iwome albo deuases.
In India Capital stodk o insuthiuint to qiue enploymant
to al iik abou tore at neabonabls u o produtivit

ontraunk aloo Hed wp wih allocahon

Spp
inettt ueus in h o i e o copl al, cbour raho.

Eshimako to caluuale aggregole dunnd and Spp an

nunbtr o preblems
se
pn'u moeufs
rmchd by
dara
divie to dishingwn
asampe sep enahon
inaurake- reduuts .

covnoroAnBs we L
rom supp
issue in a genena aulibrium
94 bedn to examine he
lok of malut claanna
maromuwdal Ha allows or
hrstorna pne and
and calb rakd. to reproduus

ouu polhs.
 gRAS to deaP Thio Mappens
coss auses
Kising lnbon vaoura
iwahion and ch
betaure expula1ow ot t u n
(os and dhange hwg pn.
Dst uad H s to produe
amon
beuauoe h e
adsuwtmmk muuhanism ocumy
The sel
sustauua produa
ouhut that a wun Ccan

renouun
on sto o
hinahy dipeds
. ulum a m o t e
LRAS vehal a ul epyne