Govt awaits annual GDP data to decide on stimulus exit

Strong industrial growth numbers do indicate that the government may start thinking of withdrawing stimulus measures, says chief statistician Pronab Sen

Economic growth numbers for the current fiscal, to be released by May, will provide the actual picture to the government to decide if stimulus packages could be rolled back, chief statistician Pronab Sen said on Wednesday, reports PTI.

However, strong industrial growth numbers do indicate that the government may start thinking of withdrawing these measures, Mr Sen told reporters.

Industry growth has started picking up in recent months fuelling suggestions from the Reserve Bank of India (RBI) and other analysts for a partial rollback of stimulus measures taken to ward off the impact of the global economic slowdown last year.

Mr Sen, a secretary in the ministry of statistics and programme implementation, said that industrial growth figures give the supply-side picture and do not indicate whether demand is actually there to take that supply, or if inventories are only building up.

The gross domestic product (GDP) data provides demand-side figures also, Mr Sen said, adding that it was up to finance minister Pranab Mukherjee to take a call in the upcoming budget on stimulus measures, depending on industrial growth numbers or economic growth figures.

"It is up to the finance minister to either play safe (in the budget) and wait for actual economic figures to come out or play a gamble and take a decision depending on industrial growth numbers," Mr Sen said.

Industrial growth for November stood at 11.7% against just 2.5% a year back. For the first eight months, industrial production grew by 7.6% against 4.1% a year ago.
 

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