Ahead of the general budget, the Planning Commission has suggested the government should roll back steps to stimulate the economy as emergency measures cannot be allowed to continue endlessly.
“These (three fiscal stimulus packages) were emergency measures that we had taken... the lower excise rate duty that has been given in the fiscal stimulus package of December and January and after the interim budget, should be rolled back... may be from September,” newly inducted Planning Commission member Saumitra Chaudhuri said.
“I think we have to be very clear, we have to give clear signals that the government is really serious about the fiscal consolidation even when the conditions are difficult,” Chaudhuri said.
The fiscal deficit cannot be allowed to expand in anticipation that the government will reduce it later, he said, adding there has to be a check on fiscal expansion as emergency measures cannot go endlessly.
As a result of the stimulus packages announced by the government to arrest the impact of the global financial meltdown on the economy, the fiscal deficit of the government zoomed to 6.2 per cent of the GDP in 2008-09 as against 2.5 per cent anticipated earlier.