We can't grow rich by our money going around in circles.

"The Reserve Bank of India (RBI) has cut its benchmark repo rates by 75 basis points (bps) over four months," wrote R Singhal. Now it is up to the government to revive "animal spirits" in the economy "which faces fresh risks from weakening private consumption expenditure and investment demand, incipient inflationary pressures because of rising food and oil prices, and global headwinds from trade wars and geopolitical tensions". The government will need to spend more to stimulate growth because, "According to the Centre for Monitoring Indian Economy, the monetary value of stalled projects touched Rs 2.68 trillion by the end of March 2019, up more than 600% since June 2018." The growth rate of the Indian economy was 6.8% in the last financial year ending on 31 March, and is expected to increase to 7% in this fiscal. But, what is the optimum growth rate for our economy? Indian politicians compare with China which grew by 10% in 2003, 10.1% in 2004, 11.4% in 2005, 12.7% in 2006 and 14.2% in 2007. India is not China. China's total exports were $2.41 trillion in 2017 which is new money coming into the economy. India, on the other hand, exported a total of $331 billion but imported a total of $507.44 billion in 2018-19, so that our trade deficit was a record $176 billion, which was an outflow of money. The International Monetary Fund (IMF) "lowered its growth forecast for 2019 to 3.3 percent from the previous level of 3.5 percent in its latest World Economic Outlook (WEO)". But the World Bank is more pessimistic, predicting a global growth rate of "2.6% in 2019 before inching up to 2.7% in 2020". If other economies are slowing down there will be lower appetite for our exports. So growth has to come from domestic consumption. However, a survey by the RBI showed a sharp decline in Private Final Consumption Expenditure which "had an average share of 56% in India's GDP between 2014-15 and 2018-19", wrote R Kishore. One obvious way to increase consumption is to create more jobs but the government has resorted to "a heavy emphasis on welfare payments and social-sector resource transfers, streaking the government's economic policy with a social-democratic tint". Where is the money going to come from? One is to raid the surplus of the RBI of Rs 3 trillion for which a committee has been set up to make it look kosher. The other is to raid the 37 listed public sector companies whose reserves grew by 25%. And finally, "the government should not be afraid of accommodating a slight slippage in the fiscal deficit target". The government already does that by hiding its expenditure by borrowing through companies it controls, known as "off balance sheet", and by not paying its bills. For sustained economic growth the government has to follow proper economic policies and not resort to flimflam. The first lesson: Money doesn't grow on trees. For governments, as for individuals. We won't grow if we keep paying others.