New Delhi: Ahead of the general budget, the Planning Commission has suggested the government should roll back steps to stimulate the economy as emergency measures cannot be allowed to continue endlessly.
Newly inducted Planning Commission member Saumitra Chaudhuri said the government had resorted to fiscal stimulus measures in December 2008 to deal with the emergency situation in the wake of the global economic meltdown which also affected the Indian economy badly.
“The lower excise rate duty that has been given in the fiscal stimulus package of December and January and after the interim budget, should be rolled back... may be from September,” Chaudhuri said.
“I think we have to be very clear, we have to give clear signals that the government is really serious about the fiscal consolidation even when the conditions are difficult,” Chaudhuri added.
The fiscal deficit cannot be allowed to expand in anticipation that the government will reduce it later, he said, adding there has to be a check on fiscal expansion as emergency measures cannot go endlessly.
As a result of the stimulus packages announced by the government to arrest the impact of the global financial meltdown on the economy, the fiscal deficit of the government zoomed to 6.2% of the GDP in 2008-09 as against 2.5% anticipated earlier.
This year the government took some more measures to keep it under control but with the signs of the economy recovering, “we should now set back the thing which we just cannot maintain,” he added.
Chaudhuri further said he would persist with the finance ministry to roll back measures taken to stimulate the economy after the collapse of America’s iconic investment banker Lehman Brothers in mid-September last year.
“At least... I can specifically say that I have been writing also (for phasing out measures), I have given a letter to finance minister before I came here as a member of Planning Commission. I can persist with that,” he said.