With the Indian economy growing at better than the estimated rate of 7.4 per cent in the last fiscal, Chief Statistician Pronab Sen today said partial withdrawal of the stimulus is going to work well for the economy.
"Private consumption would increase and government consumption would come down in the first quarter of this fiscal. Stimulus withdrawal is going to work well," Sen told reporters after the release of GDP data.
In the last fiscal, private final consumption expenditure declined by 57.3 per cent from 57.7 per cent a year ago, while the same expenses by the government rose by 12.3 per cent from 11.7 per cent, indicating that the stimulus was still needed in the economy.
The government withdrew the stimulus partially in this fiscal's Budget by raising excise duty by two per cent. The impact of this measure could be there for just the last month of 2009-10, that is March.
In the 2009-10 fiscal, mining and quarrying grew by 10.6 per cent compared to just 1.6 per cent a year ago.
The sector saw a robust jump of 14 per cent in the fourth quarter.
Sen attributed this to gas and oil output from RIL's D6 block in the KG Basin and Cairn Energy's Barmer fields in Rajasthan.
He said in the first and second quarters of this fiscal, output from these fields would result in a 40 basis points rise in mining and quarrying.
To a query on reduction of fiscal deficit because of spectrum money, he said a policy decision has not been made so far as to whether money generated through the auction of 3G spectrum would be used for reducing fiscal deficit or not.
Sen said both growth and inflation should be watched for any policy action.
He said the global situation is much more uncertain now than a couple of months back.
As such, the Chief Statistician said the growth figure of 7.4 per cent during 2009-10 would not be a deciding factor for economic expansion this fiscal.
"Global situation is such that I think that much greater sense of uncertainty in the global economy is there than we had in couple of months back. So far as GDP in 2010-11 is concerned, I don't think these figures would make any material difference. European situation is a new phenomena, how it is going to impact on macro-basis on our economy, that we don't know," he said.
The Indian economy grew by better than 7.2 per cent, as calculated by Central Statistical Organisation in its advance estimates.