Should the government loosen its purse strings?

  (Source: The Hindu)

With the Union Budget 10 days away, many economic observers are now focused on what support the Centre can offer the economy, which is still struggling to recover from the pandemic. Some analysts believe that the government must keep its spending in check to prevent price rise from getting out of control. Retail inflation is hovering close to 6%, while the wholesale inflation rate is in double digits. Other analysts, however, believe that the current rise in prices is a temporary phenomenon, and that the government must ignore the fiscal deficit and ramp up spending to support the ailing economy. In a conversation moderated by Prashanth Perumal J., N.R. Bhanumurthy and Himanshu discuss the way forward. Edited excerpts:

What is your view on the current trend in price inflation?