Not much scope for further stimulus to economy: PM
With government finances coming under pressure, Prime Minister Manmohan Singh on Wednesday said there was not much scope for giving further stimulus to the Indian economy to safeguard it from the global meltdown.business Updated: Sep 26, 2009 15:21 IST
With government finances coming under pressure, Prime Minister Manmohan Singh today said there was not much scope for giving further stimulus to the Indian economy to safeguard it from the global meltdown.
"Our response (of stimulus packages) was to a specific domestic situation. It is true that we have limited scope for accelerating stimulus package and our options are limited because of factors like substantial fiscal deficit and Reserve Bank's monetary policies," he told a press conference at the end of G-20 summit here.
Asked whether the government would consider withdrawing the stimulus package in view of signs of recovery or whether it would inject a fresh dose, he said, "I would not like to announce package or policy from the foreign soil."
As the economy started feeling the pinch of global crisis especially after collase of Lehman Brothers in September last year, the government had announced a series of fiscal and monetory reliefs to stimulate demand.
But the stimulus packages led to a steep rise in the fiscal deficit which has been pegged at 6.8 per cent for 2009-10. It was 6.2 per cent in 2008-09.
While Indian government has limited resources and options to accelerate the stimulus, it asked the developed nations not to abruptly withdraw the packages announced by them.
The G-20 leaders "agreed to avoid any premature withdrawl of stimulus", according to the statement after the summit.