New Delhi, Dec 2 (IANS) Even as the Indian economy registered its slowest quarterly growth in over two years, Planning Commission Deputy Chairman Montek Singh Ahluwalia Friday said there is no need for a special stimulus package to boost growth.
‘I don’t think the slowdown happened because of lack of stimulus. What is the case for stimulus,’ said Ahluwalia at the Hindustan Times Leadership Summit.
The economy grew by 6.9 percent in the July-September quarter of the current fiscal, lower than the 7.7 percent in the first quarter. For the first six months of 2011-12, the average growth rate is 7.3 percent.
At the height of the global economic crisis in 2008-09, the government had injected fiscal stimuli worth more than 12 percent of the gross domestic product (GDP).
The plan panel deputy chief, however, said in a sense there was a case for a stimulus ‘because the (fiscal) deficit will be exceeded’. The deficit, he said, was likely to be above the budget estimate of 4.6 percent of the GDP.
‘If you just count the different elements where there is deterioration it may look like 1 percent (more than fiscal deficit budget estimate). We don’t know the net effect. How much more I can’t say, but I did say it will be more than 4.6 percent,’ Ahluwalia said.
‘But there will be savings on expenditure. They may be able to reduce expenditure,’ he added.
The government’s fiscal deficit has risen to Rs.3.07 lakh crore, or 74.4 percent of the budget estimates, in the first seven months (April-October) of 2011-12 even as non-tax revenue growth has declined.
