Mumbai: The Wholesale Price Index (WPI) is low in 2009-10 and one did not see any problem except oil prices which could affect it, a senior Parliamentarian said.
“This year (2009-10), our WPI is low and I don’t see any problem on the horizon which could destabilise us except oil prices which remain a question,” Rajya Sabha MP and former Reserve Bank governor, Bimal Jalan, told reporters in Mumbai on Wednesday.
On the high fiscal deficit, Jalan said that he did not think that giving stimulus packages posed any problem.
“I don’t think it is a question of stimulus. At the moment, the question is essentially if you were to reduce the fiscal deficit, you will be reducing things that the country needs like capex. You cannot reduce food, oil or fertiliser subsidies or other programmes — it won’t be desirable,” he said.
On taxation, the Rajya Sabha MP said that it would not be good for the country not to have a reasonable rate of tax on profit and dividend.
Speaking about the change in RBI rates, Jalan said that the change in rates would not have the same kind of impact on the final rate as it used to in earlier days when the spreads were lower.
Earlier, deputy chairman, Planning Commission, Montek Singh Ahluwalia, told reporters that the fiscal deficit was not a concern. He said that even in the US, it was as high as 11%.
“The Government is hopeful of controlling it (India’s fiscal deficit)”, he said.