Mumbai: After the government raised the debt-raising limit by 54 percent in the wake of the corona virus epidemic, experts are in favor of printing new notes to a extent to meet the government’s deficit. He believes that at the moment there is a need to increase expenditure to support the economy and if this is not done then there will be such loss, which is not possible to compensate.
Raghuram Rajan, former Governor of Reserve Bank of India, endorsed the idea of withdrawing notes from the Reserve Bank for debt. He advocated the issuance of additional notes by the Reserve Bank for government loans to protect the poor and the affected and the economy and to increase the fiscal deficit limit in this extraordinary time.
The first such demand came in early April. At that time, Kerala Finance Minister Thomas Issac had expressed his indignation at offering the state a coupon (interest rate) of about nine per cent to sell bonds worth Rs 6,000 crore to deal with the circumstances of the epidemic.
Isaac had suggested at that time that the central government raise the money by issuing Kovid bonds on five percent coupons and help the states from there. Isaac had said that the RBI itself should buy such bonds from the central government. Many other economists have also suggested to manage resources out of the box to help the poor and boost the economy.
