Article;
Govt Working on Norms on Investment of Surplus Funds By CPSES
Comment;
If the
government has surplus and wants to invest it somewhere meaning fully it should
invest in human capital, on education and skill development. The merit of this
kind of investment will be to create more employment opportunities through
multiplier. Employment multiplier is older than investment multiplier and is
also the root of the same. Keynes used employment multiplier to explain
investment multiplier. It simply says that if we create employment by public
spending it actually creates employment in other places, a multiple of the original
employment creation.
Moreover, if the
government has money we should invest in oil and exploration of oil fields.
This is also very important, apart from skill development, because if we look
at history we will find that most of the recessions (in the US) we have been
through are associated with oil price booms. Means it can create constraints
for growth. Oil prices are easily transmitted to other prices through transport
prices, and, if the government wants to keep a tab on prices and inflation it
should keep oil under its hand.
2.8 Lakh-Crore is much money we can easily
spend on the two heads and keep the rest as surplus…
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