Buoyed by the prospects of economy bouncing back to 9 per cent economic growth, the Economic Survey on Thursday suggested gradual roll back of stimulus steps unveiled in the wake of the global financial meltdown.
This, it said, would help cut down the fiscal deficit that is estimated at 6.8 per cent of GDP in 2009—10 that was fed by a fall in indirect tax collections and delay in 3G auction.
“The fast—paced recovery of the economy underscores the effectiveness of the policy response of the government in the wake of the financial crisis. Moreover, the broad—based nature of the recovery creates scope for a gradual rollback, in due course, of some of the measures undertaken over the last 15 to 18 months,” said the Survey, tabled in Parliament.
This was part of the policy response to the global slowdown, “so as to put the economy back on the growth path of nine per cent per annum,” it added.
With the stimulus measures primarily comprising cut in indirect taxes, the Survey said there is likely to be a shortfall in tax collections under these heads.
On the other hand, non—tax revenue would also take a hit due to delay in realisation of spectrum auction, it said. 3G mobile spectrum auction was expected to fetch Rs 35,000 crore to the government and is now slated for April 9, 2010.
However, the Survey hoped to rein in fiscal deficit at just about Rs four lakh crore, which is 6.8 per cent of GDP (6.5 per cent in the new series of GDP) with the help of some restraint on expenditure.
Link to Economic Survey 2009-10