Washington: The International Monetary Fund (IMF) has said that any relief in the form of stimulus packages to tide over the impact of the global financial meltdown should be temporary and without impairing the ability of governments to service public debt.
“Fiscal stimulus packages should comprise predominantly temporary measures...It should not become permanent”, the IMF said in a recent paper on “The state of public finances:outlook and medium-term policies after the 2008 crisis”.
The Indian government has already announced three fiscal stimulus packages since December to boost the industry, reeling under the impact of the global financial meltdown.
Inflation seen at 2.34% in week ending 28 Feb
Mumbai: The annual inflation rate is forecast to have dropped to near seven-year lows at the end of February, following lower prices of manufactured goods and food articles, a Reuters poll of 10 analysts showed on Monday.
The median forecast was for a 2.34% rise in the wholesale price index in the 12 months to 28 February, compared with a rise of 3.03% in the previous week.
Separately, Axis Bank Ltd said in a note on Monday that inflation is expected to fall to 0% by the end of March 2009 following a cut in factory gate duties, aviation turbine fuel prices and a base effect.
India’s industrial output seen down 0.4%
New Delhi: India’s industrial output is forecast to have contracted in January by 0.4% from a year earlier, as a worsening global economy slashed demand for Indian goods and domestic activity remained subdued.
A ‘Reuters’ poll of 10 analysts forecast annual growth in the index of industrial production (IIP) would better December’s drop of 2%, despite exports falling an annual 16% in the month in a fourth straight loss.
Montek to attend G-20 preparatory meet
New Delhi: Ahead of the G-20 summit, Planning Commission deputy chairman Montek Singh Ahluwalia will lead a delegation to a preparatory meet on March 11 in London where deliberations on issues like liquidity crunch and reforms in international financial institutions are likely be taken up.
“Beside Ahluwalia, Reserve Bank of India governor D. Subbarao and economic affairs secretary Ashok Chawla will participate in the G-20 sherpas meeting with their counterparts of the other member nations,” a senior government official said.
Issues like completion of Doha Round, the global liquidity problem, cooperation between all the central banks and credit problems of exporters would be discussed, he said.
ADB moots more fiscal stimulus plans
New Delhi: The Asian Development Bank (ADB) on Monday recommended that the Indian government should continue to provide further fiscal stimulus to the economy to tide over the current economic downturn once the new government takes over.
However, as a long-term objective, it has suggested expenditure reforms and reduction of the current high fiscal deficit.
In a study titled “The impact of global economic slowdown on South Asia”, the ADB also called for “continued aggressive easing” of monetary policy by the Reserve Bank of India through rate cuts and reduction in reserve requirements.
—Asit Ranjan Mishra