New Delhi, Feb 27 (Calcutta Tube) The fiscal stimuli since December 2008 to prime the Indian economy will be withdrawn fully only when the recovery is robust and sustained, Finance Minister Pranab Mukherjee said Saturday, a day after presenting the budget for 2010-11.
‘I am committed to fiscal consolidation in the interests of the economy’s capacity to sustain growth in the medium and long term,’ the finance minister told the annual meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI).
‘This can be achieved through a robust recovery in private investment and consumption demand,’ he said, urging captains of Indian industry assembled here ‘to respond to the challenge’.
Mukherjee also said that the country needed to look at its export strategy afresh, so that the recovery in November 2009, after 13 successive months of decline, can be sustained in the long term.
‘There are some concerns over the extent to which the export recovery that was seen in November and December can be sustained. There is uncertain recovery in the developed economies,’ said the minister.
‘We need to take a re-look at our strategy. We should diversify our export markets to recover some of the growth momentum.’
The finance minister, however, drew comfort from the fact that the fundamentals of the Indian economy remained strong and the positive aspects of the recent performance far outweighed the negatives.
‘We need to pursue the factors underpinning the recent spurt in growth to quickly regain the momentum that slipped in the past year,’ he said, adding: ‘One can hope to see the economy breaking the double-digit growth barrier in the very near future.’
During the interaction, outgoing chamber president Harsh Pati Singhnia appreciated the relief on personal tax in the budget but said the increase in minimum alternate tax on the corporate sector to 18 percent from 15 percent had left the industry disappointed.