No reversal of stimulus before achieving 7% GDP: Montek

No reversal of stimulus before achieving 7% GDP: Montek

New Delhi: Pitching for continuance of the stimulus packages, Planning Commission deputy chairman Montek Singh Ahluwalia on Thursday said the concessions given to the industry to combat global financial meltdown need to remain till the economy achieves 7% growth rate.

“We need to think now about when we should be starting to moderate our stance. But for the present, there is no case for doing anything other than continuing the stimulus," Ahluwalia told reporters here.

He said it would be a mistake to think that the world economy has recovered. “The fact is that the world economy has stopped going down, it’s beginning to recover but is still quite low," he said.

For the current fiscal 2009-10, he said the country must make sure that the economy does better than 6.3%, which has been the prediction of the Planning Commission for the current financial year.

Shying away from predicting a date for the government to exit from the stimulus measures taken after the global financial crisis hit Indian shores around September-October last year, he said the growth should first touch 7%.

“Definitely, once we get to 7% growth and if inflation becomes uncomfortable...we need to look at these exit issues," Ahluwalia said adding the Reserve Bank should and is looking at the matter carefully.

The government had announced three stimulus packages in the form of tax reliefs to the industry to prop up growth.