Expressing discontent over the estimated Rs 30,700-crore stimulus package unveiled on Sunday, several economists said the government could have done more to boost the sagging growth and restoring business confidence.
Although the Chairman of the Prime Minister's Economic Advisory Council, Suresh Tendulkar, expressed satisfaction at the size of the package, the Director of think tank ICRIER, Rajiv Kumar, felt that the government could have done more.
According to Tendulkar "fiscal package is sufficient". "I expect excise duty cut will give some relief to producers. The economy should look up after the package. It is a systemic effort coupled with the monetary policy."
On the other hand, Kumar said, "Given that inflationary pressure is not there. Food and energy inflation is not the danger, fiscal stimulus could have been larger."
Pointing out that the package will help in addressing some of the problems, Crisil Principal economist D K Joshi, said, "It will not lead to turnaround of the economy."
Making a case for raising public expenditure to fight slowdown, renowned economist and Planning Commission member Abhijit Sen said that the government should suspend implementation of the Fiscal Responsibility and Budget Management (FRBM) Act for two years.
Under the FRBM Act, the government is obliged to eliminate revenue deficit and reduce fiscal deficit in a calibrated manner.
In order to boost demand and propel economic growth, the government slashed excise duty by four per cent across the board and announced raising the public expenditure by Rs 20,000 crore in the current fiscal. Taking into account the revenue loss and additional expenditure on various accounts, the package is expected to cost the exchequer Rs 30,700 crore.