Kolkata, Jun 19: Demand in the economy will increase when the uncertainty regarding health in the wake of COVID-19 outbreak ends, Chief Economic Advisor Krishnamurthy V Subramanian said on Friday.
Speaking at a webinar session organised by Bharat Chamber of Commerce, Subramanian said that discretionary spending in the economy has not risen due to uncertainty regarding health in the wake of the coronavirus outbreak.
Unlike in countries such as the US where people buy food after getting cash transfers, the scenario is different in India.
"In India, we have a public distribution system which provides food to the people. So, people in our country resort to precautionary motive due to uncertainty," he said.
According to him, this uncertainty arising out of the health factor will stay until a vaccine for COVID-19 is developed, and spending will not pick up till then.
"People will save more and the right time for increasing demand is when uncertainty is not there", Subramanian said.