By IANS,
New Delhi : The government is unlikely to withdraw the stimulus packages now as domestic firms would be hit in case the global economy collapses, Finance Minister Pranab Mukherjee said Wednesday.
“Exiting from the stimulus packages now may not be the correct approach because if the world economy collapses, the depression would be deeper. I am not hinting at anything,” Mukherjee said at a function here.
Referring to his interactions with Japanese Premier Yukio Hatoyama, who was here earlier this week, Mukherjee said he had stressed on the need to balance economic growth and fiscal deficit.
“What I told him was that we shall have to strike a balance between the requirement of the economy and the capacity of the economy to bear this level of fiscal deficit and borrowing.”
He said the stimulus packages would widen the fiscal deficit. “This kind of fiscal deficit cannot be sustained for a longer period.”
The government has projected a fiscal deficit of 6.8 percent of GDP in the current fiscal, as against 6.2 percent the last fiscal.