No case for stimulus to boost moderating growth: Plan panel

The government’s fiscal deficit has risen to Rs3.07 lakh crore, or 74.4% of the budget estimates, in the first seven months (April-October) of 2011-12, as non-tax revenue growth has declined

New Delhi: The Planning Commission on Friday said there is no case for providing stimulus to the industry to arrest moderating growth as the fiscal deficit is high and may exceed the budget estimate of 4.6% by about one percentage point, reports PTI.

“I don’t think it (slowdown) has happened because of lack of stimulus... What is the case for stimulus. In a sense, there is going to be a stimulus because the deficit will be exceeded,” Planning Commission deputy chairman Montek Singh Ahluwalia said while speaking at the Hindustan Times Leadership Summit.

He conceded said that the fiscal deficit is likely to be above the budget estimate of 4.6% of gross domestic product (GDP).

“If you just count the different elements where there is deterioration it may look like 1% (more than fiscal deficit budget estimate of 4.6%)... Net effect we don’t know yet. But I did say it will be more than 4.6%,” Mr Ahluwalia said.

He, however, said that there is no question of going for a stimulus package to boost growth.

“Already the fiscal deficit will be worse than budgeted estimate (of 4.6% of GDP)... How much more I can’t say. But there will be savings on expenditure. They (the government) may be able to reduce expenditure,” he added.

The government’s fiscal deficit has risen to Rs3.07 lakh crore, or 74.4% of the budget estimates, in the first seven months (April-October) of 2011-12, as non-tax revenue growth has declined.

The economy expanded at the slowest pace in two years at 6.9% in the July-September quarter of the current fiscal. For the first half (April-September) of the fiscal, the average growth rate is 7.3%.

GDP growth in the second quarter of the fiscal slowed to 6.9% from 8.4% in the corresponding period last year, mainly on account of rising interest rates and uncertain global growth scenario.

GDP growth in 2010-11 stood at 8.5%.

Growth in eight core infrastructure industries also dipped to 0.1% in October, the lowest in five years.

“Slowdown has occurred because of (low) investment expectations, because of political uncertainty and I think because of delay in implementing infrastructure projects. We should concentrate on the last (infrastructure projects)...

political mood will change within a period of time,” Mr Ahluwalia said.

User

Apple may spoil Samsung’s Australian Christmas

Australia’s High Court extended the ban on the release of Samsung’s Galaxy Tab 10.1 to 9th December, scuttling Samsung’s plan to begin importing the device into Australia this weekend and take advantage of the pre-Christmas shopping season.

Read Article...

User

StatCounter: Chrome overtakes Firefox globally

Chrome has managed to overtake Firefox as the world’s second most used browser, beating predictions with a month to spare.

Read Article...

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)