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The paradox of India’s stimulus response to the covid-19 crisis

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Indian economy is limping back to normal. There will be a permanent loss of output as a result of the pandemic. It is unlikely that output will get back to pre-covid levels before the end of the next financial year.

That is two lost years, and a permanent output loss of around $350-400 billion.Much has already been written about the cautious fiscal response of the Narendra Modi government over the past six months.

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