New Delhi: The Planning Commission has said
the right time to withdraw stimulus packages given to the
industry to combat the impact of global slowdown will be
during the next financial year.
"Neither fiscal nor monetary policy needs to be changed
during the current fiscal year, and the time to make further
adjustments to one or both of these instruments will be in the
next fiscal year," Planning Commission Deputy Chairman Montek
Singh Ahluwalia told Karan Thapar in an interview to a private TV channel.
The changes in fiscal policies will be announced only in
next year`s Budget, he said, pointing out that the government
will not be looking at pushing economic growth through fiscal
Stock markets went into a downward spiral earlier this
month after Prime Minister Manmohan Singh announced that
stimulus measures would be withdrawn next year, but Finance
Minister Pranab Mukherjee later said that the tonic to the
economy would continue till there were firm signs of recovery
in the developed world.
"I think you want to avoid any impression that we are
looking for a growth that is stimulated by steroids i.e. more
and more fiscal expansion...We cannot afford it -- it would be
the wrong thing to do," Ahluwalia added.
On inflation, the Planning Commission deputy chairman
said the government needs to tackle price rise in food items
by a better public distribution system and speeding up
Ahluwalia said inflation is not a big problem and the
government`s focus is "to get the economy back to a solid
He said he expects the economy to grow at 6.3 per cent
this fiscal, and the overall inflation to be in the range of
5-6 per cent by March end.
Increasing minimum support prices (MSPs) of rice and
wheat, Ahluwalia said, was being done consciously to provide
higher returns to farmers, though it led to higher prices of
"Food prices are going up globally, so there is no reason
why Indian farmers shouldn`t be getting the benefit of what is
a globally appropriate price of food," he added.
However, the Oxford-educated economist said this argument
does not extend to vegetable price rise, which is witnessing a
"temporary disruption" that might come down automatically.
On concerns over decline in agriculture production this
fiscal, he said it would be one to three per cent lower than
the previous year.
As for as economic growth is concerned, Ahluwalia said,
"...it`s not that things are now well set, even to get 6.3 per
cent, we have to do a lot of work to make sure that investment
He said getting back to 9 per cent growth by the end of
11th five year plan, which ends in March 2012, will be a real
sign of strength.