Union Finance Minister Pranab Mukherjee on Wednesday assured industry of continuing with the existing level of stimulus package stressing that the economic recovery had not been broad-based.
Speaking at a function organised by Confederation of Indian Industry (CII), Mr. Mukherjee said that the recovery process continued to be driven by the stimulus package and was far from completely broad-based. He ruled out the possibility of withdrawing the stimulus measures fully until the fruits of the economic growth spread to all sectors of the economy and reached to all sections of the society.
Pointing out that he had rolled back the stimulus package partly in the case of excise duty by two percentage points, Mr. Mukherjee said that the thrust of the budget was to accelerate growth. He underlined the need to tone up the delivery system which were proving to be the bottleneck in spreading the benefits of growth to all sections of the society. Mr. Mukherjee was confident that the fourth quarter of the current fiscal year would show a better growth trajectory after a slip in the growth rate in the third quarter to 6 percent.
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Mr. Mukherjee was equally hopeful of the next fiscal year being more rosy when the GDP growth rate could be in the range of 8 to 8.5 per cent. “The budget is predicted on that assumption.” With that in mind, Mr. Mukherjee's endeavour is to peg the fiscal deficit to acceptable levels of 5.5 per cent in 2010-11 as against 6.7 per cent of GDP in the current fiscal. Moreover, the budget outlines a clear direction for the downward movement of the fiscal deficit over the coming years.
With the objective to consolidate the gains from the recovery process, Mr. Mukherjee said that he had not only introduced tax reforms but also allocated required resources for priority sectors to ensure growth with inclusiveness.
Mr. Mukherjee was hopeful that the steps taken would yield results and cool the prices down.
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