The Centre today suspended hikes in dearness allowances for central government employees and pensioners till July 2021, without any arrears.

The government says the move was keeping in mind the strain on its finances due to the coronavirus pandemic.

But are austerity measures the way forward during an unprecedented economic crisis like this?

Though many say the government must tighten its belt, many experts are of the belief that a stimulus package is a better idea.

Most major economies have rolled out Covid-19 stimulus packages, which amount to about 5-20% of their GDP.

In India’s case, it’s about 0.85% of our GDP.

What should the way forward for the government be?

Vikram Chandra explains.