Prime Minister Manmohan Singh today ended the suspense over the continuation of the fiscal stimulus, stating it would be phased out next year and promised a “gradual but steady” push to financial sector reforms.
“Like other countries we resorted to a significant stimulus and we will take appropriate action next year to wind this down,” he said at the 25th India Economic Summit here.
With signs of global recovery, a worldwide debate is on about whether or not to continue with the life-supporting packages running into trillions of dollars. India’s fiscal and monetary sops are estimated at 3.5 per cent of the GDP and led to ballooning of fiscal deficit to over six per cent.
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Addressing global CEOs and captains of industry, the Prime Minister, however, gave them a morale booster and promised a “decisive change” in the pace of economic progress.
“In the coming months and years, I hope to see a decisive change in the pace of our progress to becoming a leading economy in the world,” he said.
After unveiling a bold PSU sell off plan last week, Singh, who as finance minister in the 90s initiated liberalisation, said that his government is better placed now to unleash reforms particularly in the financial sector.
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“We are also better placed than any time in the recent past to push the reform process forward. We need to ensure that financial system can provide the finance needed for our development. This opens up a broad agenda for reforms,” he said.