India Tests the Limits of Public Finance in Emerging Markets

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Heard on the Street: India must spend far more to rescue its economy from the ravages of the pandemic and the lockdown

The Indian government promised a blockbuster economic stimulus Tuesday that lifted the country’s stocks. But the country’s economic circumstances looked bleak even before the pandemic began, and it’s unclear who the buyers for all this debt will be. The central bank may eventually need to step into the breach.

India is relaxing some lockdown restrictions as the brutal impact of the economic seizure becomes clear: unemployment rose to 27.1% in the week to May 3, and many low-income workers have or are at risk of running out...

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