Government Must Ramp Up Spending To Revive Growth: Carnelian Capital’s Vikas Khemani
With India’s growth rate seen at an 11-year low in 2019-20, Carnelian Capital Advisors’ Vikas Khemani is betting on government spending to revive the economy.
“The government has to pick up the burden of spending in the economy,” Khemani told BloombergQuint, adding that state spending has weakened in past 12 months. “We don’t mind fiscal deficit widening a bit, but government spending has to come back.”
India’s fiscal deficit widened in November 2019, raising concerns that the country would breach its budgeted target for the third straight year.
The gap between the government’s revenue and expenditure widened to Rs 8.07 lakh crore as of November, according to data released by Controller General of Accounts. That’s 114.8 percent of the budgeted estimate of Rs 7.04 lakh crore for 2019-20.
Still, Khemani believes India needs to build the necessary infrastructure to bridge the gap between demand and supply. “Growth slowed to lower than 5 percent because liquidity wasn’t reaching users,” he said.
WATCH | Carnelian Capital Advisors’ Vikas Khemani On Indian Economy