Industry slowdown no case for stimulus: Montek
02 Dec 2011
The recent moderation in industrial production in the country does not warrant fresh stimulus measures, Planning Commission deputy chairman Montek Singh Ahluwalia said, adding that with a high fiscal deficit that exceeded the budget estimates of 4.6 per cent, the country could not afford monetary easing.
"I don't think it (slowdown) has happened because of lack of stimulus... what is the case for stimulus. In a sense, there is going to be a stimulus because the deficit will be exceeded," Ahluwalia said while speaking at the Hindustan Times Leadership Summit.
Ahluwalia, however, refused to project the current level of India's fiscal deficit.
"If you just count the different elements where there is deterioration it may look like one per cent (more than fiscal deficit budget estimate of 4.6 per cent). Net effect we don't know yet. But I did say it will be more than 4.6 per cent," he said.
There is no question of going for a stimulus package to boost growth. On the contrary, he said, with deficit continuing to rise, the government may reduce its expenditure.
"There will be savings on expenditure. They (the government) may be able to reduce expenditure," he said.
