Govt considering $7.7 billion stimulus spending in FY18 to revive economy: Report

New Delhi: The government is considering a plan to loosen the fiscal deficit target so that it could spend an additional Rs 500 billion (USD 7.7 billion) in the financial year ending in March 2018, Reuters reported on Thursday quoting two government sources.

Acknowledging that private investment was short in coming, Finance Minister Arun Jaitley said earlier today that the government will come out with "appropriate action" at the right time to boost the economy.

"From day one, this is a proactive government. We are analysing the economic indicators and appropriate action will be taken at right time. There is a problem of private investment. Government has seized the issue. Very soon you will hear from us," he said here while addressing the second "India Investor Summit" organised by New York based banking and financial services company J.P. Morgan.

Jaitley had chaired a high-level meeting on September 19 to review the economic situation and discuss measures. The meeting was attended by Railway Minister Piyush Goyal, Commerce Minister Suresh Prabhu, Chief Economic Advisor Arvind Subramanian and Secretaries in the Finance Ministry -- Ashok Lavasa, Subhash Chandra Garg, Hasmukh Adhia, Rajiv Kumar and Neeraj Kumar Gupta.

Pulled down by sluggish manufacturing, growth in the Indian economy in the first quarter of this fiscal fell to 5.7 percent, clocking the lowest GDP growth rate since Narendra Modi took power in May 2014.

Two years ago, India was touted as a rare bright spot in a gloomy global economy, with GDP growth outpacing a slowing China.

But since early 2016, GDP growth has fallen for six consecutive quarters, with India losing the fastest growing economy tag to China for the second straight quarter.