Kolkata, January 01: Finance Minister Pranab Mukherjee on Thursday said a balance has to be stuck on the issue of continuity of the stimulus packages.
“The aim is to maintain growth,” Mukherjee said while addressing the members of the Indo-American Chamber of Commerce here today, adding the package should not be prolonged so as to make public debt hard and prevents the private sector from accessing resources because of huge government borrowing.
“It (the withdrawal of the stimulus measures) should not be too early as well as it could have adverse impact on the economy,” he said, however, refused to set deadline to review the stimulus packages.
The Government has pumped in Rs 2.20 lakh crore into the economy as stimulus packages from December 2008 through February this year, to revive the sagging economy following the global financial meltdown that started last September with the fall of the Wall Street titans.
As a result, the fiscal deficit has ballooned to 6.8 per cent. Mukherjee however, was categorical in stating that such high deficit cannot be sustained. At the same time, the Finance Minister said he is against any hasty withdrawal of the stimulus measures, as it is too early to conclude that the economy has firmly come out of the morass.
Mukherjee hoped that the growth momentum recorded in Q2 would be maintained in Q3 and Q4 and the overall GDP growth for the fiscal would cross 7.5 per cent. The first and second quarter GDP growth of the current fiscal was 6.1 and 7.9 per cent respectively.
Apprehensive about the role of agriculture in Q3, the minister said the farm numbers could be negative due to the severe drought and the resultant damage to Kharif crop in that many regions.
In the first quarter, the contribution of agriculture was 2.5 per cent, but in Q2 it made a nosedive to 0.91 per cent.
Mukherjee had earlier said the deficit in agriculture in the third quarter would be compensated by industrial growth touching the double digit figure.
FM to devote one month for pre-budget interaction
Union Finance Minister Pranab Mukherjee today said he will spend an entire month interacting with all stakeholders and look into their suggestions and proposals to be included in the budget.
“I will spend a full one month interacting with all stakeholders for suggestions and proposals for budget,” Mukherjee said here.
Stating that he would not speak about policy matters till the Union budget, Mukherjee said, “I will have interactions with trade bodies, trade unions, state finance ministers, the cooperative sector and the private and public sector to expose myself to suggestions for the budget.”
He indicated that the government was looking into the problems of the small and medium sector.
To a question Mukherjee said, “there will always be a gap between what should be done and what can be done.
The Union Budget is usually presented on the last day of February every year.
-PTI