New Delhi: With the economy showing mixed signals of recovery, the Government today said all components of stimulus packages may not be withdrawn at one go when the rollback process kicks in, which is unlikely this year.
"The general indication today is that stimulus will continue this year, that is the indications given by everybody. Let us not think stimulus is something that will be withdrawn all at once," Cabinet Secretary K M Chandrasekhar told reporters on the sidelines of a CII event.
Chandrasekhar said certain things in stimulus packages
might be retained while certain things might go.
He, however, refused to specify which part of stimulus
will be withdrawn.
"We have not thought what to remove. Stimulus contains
many things that might change," he said.
On broad spectrum, the Government has cut excise duty by
six per cent, service tax by two per cent and stepped up plan
expenditure.
However, certain sector specific sops like more leeway to
IIFCL to raise money to fund infrastructure project, interest
subvention and duty refunds for exports were also doled-out to
help the industry.
While industrial growth has been on the upswing, exports
have declined for the 13th month in a row.
At the seminar, Finance Minister Pranab Mukherjee, too
said "short term" stimulus would be withdrawn when recovery is
firmly in sight.
After contracting for months since October last in a fall
out of the deepening global financial crisis, industrial
production has started firming up again.
Industrial growth stood at a whopping around 11 per cent
in August and 9.1 per cent in September.
However, merchandise exports shrank to $12.5 billion –
down by 11.4 per cent, for the thirteenth month in a row in
October, as demand continued to remain sluggish overseas.
The grim scenario is that exports declined, despite a low
base of October last year.
However, Chandrasekhar said stimulus packages have been
working and there is improvement on all economic parameters.
Indian economy grew by 6.1 per cent in the first quarter
of this fiscal against 5.8 per cent in the preceding two
quarters.
Mukherjee said the impact of the financial crisis on the
common man in India would have been harder without stimulus
packages provided by the Government and RBI.
He said the impact of the meltdown has been less
pronounced on India, particularly because of market discipline
enforced by sector regulators, while maintaining competitive
environment.
The Finance Minister also allayed concerns that the
current high level of fiscal deficit, projected to be 6.8 per
cent of GDP this fiscal, would leave little resources for the
private sector.
Bureau Report
First Published: Monday, November 16, 2009, 23:30