Govt to withdraw stimulus after assessing impact on recovery

Once the adverse impact of the global shocks on the Indian economy is overcome, the process of fiscal consolidation would resume, minister of state for finance Namo Narain Meena said in a written reply to the Rajya Sabha

The Indian government on Tuesday said it would withdraw the stimulus package only after assessing its impact on the economic recovery, reports PTI.

"The decision on the rollback of fiscal stimulus measures, including the nature, pace and sequence would be based on the emerging economic situation and after careful consideration of the impact of the same on the recovery process," minister of state for finance Namo Narain Meena said in a written reply to the Rajya Sabha.

The finance ministry's statement comes in the backdrop of the ongoing debate on whether or not to roll back the sops given to the industry during the slowdown.
While the industry wants the stimulus package to continue, experts feel since the economy is back of the growth path, it is time the stimulus was phased out partially. The economy is expected to grow by over 8% during 2010-11.

Mr Meena, too, in reply to other questions, said, "The expansionary fiscal stance is a short-term measure to address demand slowdown in the economy and to minimise the adverse impact of the global financial crisis."

"Once the adverse impact of the global shocks on the Indian economy is overcome, the process of fiscal consolidation would resume," he added.
Mr Meena further said monitoring the emerging macroeconomic situation and calibrating policies to mitigate the adverse impact and restore growth momentum is an ongoing process.

The stimulus measures announced by the government in three tranches in December 2008 and then in January and February 2009 were both sector-specific and macro-economic in nature, he said.

Some of the key sectors for which specific measures were put in place include exports, especially textiles, leather and gems and jewellery; medium, small and micro enterprises; infrastructure and housing.

The Budget for 2009-10, presented on 6 July 2009, envisaged a continuance of the process of fiscal expansion and the fiscal deficit was placed at Rs4,00,996 crore for the full year (amounting to 6.8% of the GDP).

The medium-term fiscal policy statement presented to Parliament along with the Budget for 2009-10 estimates that the Centre's fiscal deficit would decline to 5.5% of the GDP in 2010-11 and further to 4.0% of the GDP in 2011-12.
 

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China property bubble burst could flatten global economic recovery

“It's simply a matter of time before the Chinese real estate bubble bursts,” insists Yi Xianrong, longtime student of Chinese property trends at the finance department of the Chinese Academy of Social Sciences. “A bubble burst in China would not only deal a fatal blow to our own economy, but would also extinguish the world's hope for recovery.”

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COMMENTS

vivek

7 years ago

Good that DB Realty stock tumbled, so future real esatte IPO will come to know that sell the houses at appropiate prices is the best option and raising money from IPO is not..
Govt regualtion is must and black money should be avoided for better economic health and good for mdeium class people...
RBI has done the good thing for medium class people.. Home prices have gone beyond upper middle class people in metros...
Black money coming from abroad and from local businessman going into real estate as there is no regulation...
Service class people cant think of buying home as they have to give atleast 20% in black in Mumbai...
As there is no regulation 80L rs flat having registration value of 45L only, its hurting govt revenue and Indias economy...

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