Govt could still contribute through lower prices...

Increasing fiscal deficit-debt limit is the second best strategy to boost spending and growth is widely accepted... the first being the lower interest rate and lose monetary policy... During the 2008 crisis the RBI reduced interest rates to 4% and now we have a higher interest rate at 6% which means we have still a lot of room to reduce interest rates... In a globalised world higher real interest rates when the developed countries real rates are negative is a perfect recipe for making the domestic economy and investment uncompetitive... However, inflation and the inflation targeting are concerns, but that is much a supply side problem... If the government could commit better supply side management, even through price stabilisation policies and funds for food supply and food security instead of increasing spending directly, it might convince the RBI to lower rates and increase domestic investment...

Inflation is a problem for the poor who have less bargaining power in the market and less income and savings, but good for businesses because it lowers real interest rates... The government should support the poor so that inflation does not affect their income function (Consumption plus Savings)... Poor people's propensity to consume is more than rich people, therefore demand would come from the poor and lower interest rate would increase investment and supply which are good for the economic growth rate...

Government should keep doors (imports) open for food and fuel supply in the short run... Inflation in INDIA is basically a supply-side problem... The Government and the RBI might incentivize imports which might improve supply and lower inflation and interest rates... Lower inflation might further increase chances of rates cuts in future... Import substitution is a better strategy to create more employment... INDIA shouldn't allow imports that it can produce at lower prices... Tariffs might incentivize local production too... It is upto to INDIA what it chooses to do... It is just how you will achieve full-employment and full growth...