A strong economy is characterised by low costs of production and economic efficiency. Only this leads to sustained and long term optimism and progress. Everything else leads to short term gains at best. Pump-priming will yield fruits when they are no longer required, adversely affect the fisc, weaken the growth and maturing of all kinds of markets (not just financial), and increase governments role in the economy. As a consequence it will increase pessimism in the economy. A better alternative is to take measures that remove pessimism directly by removing the factors that caused this short term pessimism in an era of 8 per cent growth.

The writer heads the economics research firm Indicus Analytics

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