Economists on Friday asked Finance Minister Pranab Mukherjee to continue with the fiscal stimulus until firm economic recovery amid intense speculations about a possible withdrawal of measures taken to spur the economy.
“I would say that the general trend of the people was (that) it is not the time to withdraw the stimulus. It is the general feeling of the economists,” former Chief Economic Advisor Nitin Desai told reporters after a pre-budget interaction between economists and Finance Minister Pranab Mukherjee on Friday.
National Institute of Public Finance and Policy Director Govinda Rao said the stimulus should continue till economy recovers but at the same time fiscal consolidation should be taken care of.
The government had given three stimulus packages totalling Rs 1,86,000 crore as duty cuts and other relief measures to boost the sagging Indian economy.
As a fallout, the government’s fiscal deficit rose starkly and is expected to be at 6.8 per cent of the GDP in the current financial year.
Partha Sen of the Delhi University’s School of Economics who was also present at the meeting, said the stimulus measures should not be withdrawn hastily as India is still not out of the woods.