By Dipankar De Sarkar, IANS,
London : Citing the urgent need to cut India’s fiscal and revenue deficits, Finance Minister Pranab Mukherjee Sunday ruled out any further special packages to stimulate the Indian economy.
But, he added, the timing of its exit from the stimulus strategy will be of India’s choosing — to be determined on considerations of world economic output and growth rate — rather than any globally synchronised “date-specific” criteria.
Addressing Indian journalists at the end of a meeting of finance ministers from the Group of 20 countries, Mukherjee indicated the three stimulus packages implemented between December 2008 and February 2009 had achieved what his government set out to do — halt the slide in the economic growth rate that had plummeted to 5.6 percent last fiscal.
“As a consequence, we had 6.7 percent growth rate,” he said.
“There is expected to be a shortfall in agricultural production (due to low rainfall followed by floods) to some extent, which will adversely impact the overall growth. Otherwise I could have seen perhaps more than 6.7 percent growth.”
The finance minister said India’s “exit strategy” will be coordinated in the G20 on broad principles of “overall economic growth and world output” but added: “Coordination does not mean synchronisation.”
“We will decide what type of exit we should accept. There is no question of having any further stimulus package,” Mukherjee said.
“It is the country concerned which is in a better position to address the issue. The approach should be country-specific, not date-specific.”
But he said for growth to sustain at current levels or increase, it was important for Indian exports to pick up from current levels. The country imported 10 billion pounds worth of goods more than it exported, according to September figures.
With the world’s richest nations — the European Union, North America and Japan — accounting for 62 percent of Indian exports, Mukherjee said: “Our economy cannot pick up without global recovery.”
Mukherjee said current levels of fiscal deficit “cannot be sustained for a longer period of time”, and that fiscal deficit had to come down to four percent and revenue deficit to 1.5 percent by 2012.
“Both government and the RBI (Reserve Bank of India) are working in close cooperation with each other to evolve the appropriate fiscal and monetary policy, and there is no area of disagreement or divergence of views.”