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Sharma calls for measured withdrawal of stimulus

New Delhi, Aug 23 (Calcutta Tube) Stimulus packages given to various sectors may not be withdrawn abruptly as the global economic recovery has been fragile, Commerce and Industry Minister Anand Sharma said Monday.

‘We are not out of the woods yet. I would prefer measured and calibrated withdrawal of stimulus,’ Sharma said when asked about the timeline for withdrawal of stimulus.

Most of the countries, including India, have been giving incentives to various sectors since late 2008 after a financial crisis hit the global economy.

‘Recovery so far has been fragile and the economies around the world are still emerging out of the shadows of a grim recessionary period,’ Sharma said, adding that the nervousness continued in the markets about the fiscal situation and sovereign indebtedness in the European countries.

Sharma said the government would continue to provide stimulus packages so long as it was essential to maintain growth.

Announcing annual supplement to the foreign trade policy, he said the government would provide an additional Rs.1,050 crore bonus incentive to exporters in labour intensive sectors.

‘We bear in mind our financial constraints and will take all necessary measures to sustain growth,’ he added.

Referring to the US government’s recent decision to hike visa fees, Sharma said such measures would prove counterproductive and adversely affect the global economic recovery.

‘Many of the developed countries are looking inwards for fiscal consolidation. Economic barriers like visa restrictions and hike in visa fees will negatively affect the global recovery,’ Sharma added.

The US government has increased visa fee by $2,000 for certain H-1B and $2,250 for L-1A and L-1B. This is estimated to put an additional burden of $250 million annually on the Indian IT companies.

— Indo-Asian News Service

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