New Delhi, September 20: The government would “wait and watch” the situation before deciding on rolling back the stimulus packages announced after India’s economic growth slackened impacted by the global financial crisis.
“We will have to wait and watch the situation,” Finance Minister Pranab Mukherjee told reporters on timing of reversal of the stimulus package.
The government had slashed excise duty by six per cent and service tax by two per cent in various phases and increased Plan expenditure.
This has pushed the fiscal deficit higher.
The fiscal deficit is projected to rise to 6.8 per cent of GDP in 2009-10.
The Finance Minister has already said this level of fiscal deficit cannot be sustained and aims to bring it down to 5.5 per cent next fiscal and 4.4 per cent in 2011-12.
He hoped to have an overall view of all aspects by the time of formulating the next Budget.
Mukherjee said the international view was that stimulus package should not be reversed till full recovery in Europe and North America was “distinctly visible”.
This viewpoint was expressed at a recent G-20 Finance Ministers preparatory meeting, he said, speaking after an interactive session organised by the CII on the proposed Direct Tax Code .
—Agencies