Mumbai: India is in no hurry to roll back economic stimulus measures in one go, but efforts will be made in the Budget to lower the fiscal deficit, C. Rangarajan, chairman of the Prime Minister’s economic advisory council, said on Friday.
“It will be calibrated and done in a manner that stimulus in the economy continues to persist and at the same time some adjustment is made as far as the deficit is concerned,” he said.
The government has launched two fiscal stimulus packages since October 2008 worth $4 billion (Rs16,840 crore). The central bank raised the banks’ reserve requirement for the first time in nearly a year and a half in its policy review on 29 January. It raised the cash reserve ratio for banks by a higher-than-expected 75 basis points to 5.75%, to be effective in two stages this month. One basis point is a hundredth of a percentage point.
“It has been pointed out repeatedly that the process of exit must be gradual, coordinated and must not be sudden, should not disrupt the economy, and efforts will be made to bring down the fiscal deficit in the coming Budget,” he said.