Stimulus packages to be withdrawn slowly: Rangarajan
Hyderabad: The Prime Minister’s economic panel on Thursday said the government and the RBI will have to slowly withdraw the stimulus packages given during the slowdown once the economy begins to show surer signs of recovery.
"There should, however, not be a premature withdrawal and
the RBI has to guard against re-emergence of inflation,"
Rangarajan said in his address on a two-day seminar on
`International Financial Crisis and Its Impact on India`,
The former Governor of RBI said India would see "definite
signs of recovery" in the second half of 2009-10.
On growth forecast, he said this fiscal will see a rate
of 6 and 6.5 per cent, but it will be higher next fiscal.
"Fiscal 2010-11 will see a distinct improvement in growth
and economy will grow between 7 and 8 per cent. To go back to
9 per cent growth, we have to wait for the world economy to
improve and world trade to pick up," Rangarajan added.
On whether the fiscal stimulus have been helpful to the
economy in increasing demand, he said, it would finally depend
on whether or not the additional expenditures planned were
"Also, we need to look at the composition of expenditure
and effectiveness of expenditures. Digging holes and filling
them up is not a right prescription," he observed.
On foreign capital inflows into the country, the EAC
chairman said there was a reversal in trend in the last three
to four months after the inflows shrank to just 9.1 billion
USD in 2008-09 from 108 billion USD in 2007-08.
"The flow of portfolio capital turned negative, so too
was trade credit. Things are changing now but they are not
going to be of the same order as earlier," Rangarajan pointed
Andhra Pradesh Chief Minister K Rosaiah, in his address
said, despite the economic slowdown, the state government was
able to carry on with its welfare and development programmes
with massive investments, thanks to its "disciplined financial
management" in the last five years.
More from India
More from World
More from Sports
More from Entertaiment
- DNA: Beaten by mob in Kolkata, US NRI vows never to return in India
- When will democracy get freedom from dynasty politics?
- Delhi: Taxi driver dies as BMW rams into car near IIT
- DNA: Has bad time started for American 'media' after Donald Trump became US President?
- DNA: Analyzing the role of Netaji Subhash Chandra Bose in Indian Independence
- WATCH: Epic Staredown between Goldberg, The Undertaker and Brock Lesnar at WWE Raw
- Jallikattu stir: As it happened on Monday
- Naresh Agrawal breaks silence on leaving Akhilesh Yadav-led Samajwadi Party and joining BJP
- International Space Station – When, where and how to spot ISS
- Reliance Jio impact: Bharti Airtel Q3 net profit dips 54% to Rs 503.7 crore