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India Inc unhappy with Economic Survey proposals

Updated on Thursday, February 25, 2010, 15:06 Print Email
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New Delhi: Questioning the Economic Survey`s recommendation for rollback of stimulus measures, India Inc on Thursday asked the government to continue with these incentives in the Union Budget to ensure high growth.

"For a higher growth, the government will have to adopt a calibrated approach and continue with stimulus package for at least another fiscal," Assocham president Swati Piramal said.

A day before the presentation of the Union Budget 2010-11, the Survey suggested gradual rollback of stimulus steps, including tax concessions to arrest slowdown of Indian economy in the face of global financial meltdown, echoing the recommendations made by the Prime Ministers` Economic Advisory Committee.

The rollback, it said, would help cut down the fiscal deficit that is estimated at 6.8 percent of GDP in 2009-10 that was fed by a fall in indirect tax collections and delay in 3G auction.

FICCI President Harsh Pati Singhania said: "The government should continue with stimulus measures as the growth in the industrial and export sector is mainly because of the support".

CII said that this is not the right time to roll back stimulus incentives.

"There has been definitely improvement in industrial recovery but the recovery is not complete, it will take some time ... and for that the government should continue with the stimulus," CII Director General Chandrajeet Banerjee said.

Indian Chamber of Commerce Senior vice president Vishambar Saran said, "Ultimately stimulus has to be withdrawn, but the timing and the pace has to be right.

"One thing people say, ours is not a `V` shaped recovery it is a `W` shaped recovery. The danger of another recession is there. So stimulus should not be rolled back completely unless the economy stablises," Saran said.

FICCI, commenting on the prospects of 9 percent growth in 2011-12, said, "It is achievable, if the government takes key policy initiatives mainly in sectors like agriculture and infrastructure."

It further said that there is a need to enhance investment in sectors like health and education.

Assocham, echoed views on GDP projections but cautioned that the government has to take possible precautionary measures to manage food inflation, which is hovering at 17.58 percent.

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