The Goa government plans to cut costs by Rs. 500 crore over the next six months by austerity measures to face the financial crisis. This austerity measures may not be the best policy to emerge out of the crisis at this stage and it may have an adverse effect on the economy. With reduction in cost there is likely to be a cut in production which will result in reduction in employment, less tax collection etc. The other way round is to provide a fiscal stimulus of around Rs. 1000 crore (through debt financing) to spend on infrastructure projects, (not on Ladli Laxmi and Griha Laxmi schemes) that can bring a positive effect in the economy by creating additional employment and demand.
Not austerity measures, Goan economy need fiscal stimulus
