FM hints at further roll-back of stimulus

Kolkata, Apr 10 (PTI) India's Finance Minister Pranab
Mukherjee Saturday hinted at further roll-back of stimulus
measures announced in the wake of the global financial crisis,
saying economic recovery offered room for such a move.
Mukherjee, who in the Budget for 2010-11 partially
withdrew some of the stimulus measures by increasing excise
duty by two per cent, said that the economy could still grow
by up to 8.75 per cent in the current fiscal.
"I am hopeful that the growth will climb back between
8.25 per cent and 8.75 per cent and perhaps at the mid point
around 8.5 in 2010-11," he said at a function organized by the
Association of National Exchange Members of India here in
eastern Indian city of Kolkata.
He added that "the broad-based recovery has created hope
for the gradual roll-back of some unconventional and
extra-ordinary measures taken by the government" in the form
of stimulus packages.
Besides slashing excise duty by six per cent, the
government had in late 2008 cut service tax by two per cent to
cushion the industry from the impact of the global crisis.
Mukherjee exuded confidence that the measures outlined in
this year's budget are likely to revive private investment and
put the economy back on the growth path of 9 per cent per
annum.
"The pace and the shape of the recovery, however, remains
uncertain. The challenge of the hour is to manage the recovery
of the economy, which entails a policy reversal from the
crisis expansionary stance and recognising the need for
carrying forward process of exit," Mukherjee said.
He said the economy witnessed a "sufficient" slowdown in
the growth rate in the second half of 2008-09, following a
financial crisis that began in the industrialised nations 2007
and spread across the world.
After clocking an impressive 9 per cent growth for the
previous three fiscals till 2007-08, India's GDP grew by a
relatively modest rate of 6.7 per cent in 2008-09. The economy
is expected to grow by 7.2 per cent in 2009-10. PTI