PMEAC sees 8.2% growth in 1 yr, wants stimulus cuts

Feb 20, 2010

New Delhi, Feb. 19: The Prime Minister’s Economic Advisory Council (PMEAC) on Friday made a case for a partial rollback of stimulus measures by raising excise duties and reducing public expenditure in a phased manner. It also projected that the economy was likely to grow by 8.2 per cent in 2010-11 and by nine per cent in 2011-12.

Indicating that its observations might be reflected in next week’s Budget, PMEAC chairman C. Rangarajan said: "High deficit (estimated at 6.8 per cent this fiscal) is unsustainable and steps towards fiscal consolidation is the need of the hour." There was a case for adjustment of duties, he said. The PMEAC also expressed concern over high food inflation, which it said could have a cascading effect on other sectors, but expressed optimism that inflation would cool down a tad in February-March.

PMEAC member Govinda Rao clarified later, however, that the council’s recommendations were not suggestions to finance minister Pranab Mukherjee.

Age Correspondent

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