PM adviser says RBI may trim stimulus

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Reuters Tags : RBI, inflation, monetary stimulus Posted: Wednesday, Nov 11, 2009 at 1148 hrs Mumbai:

The fiscal deficit needed to be reduced by 1 to 1.5 percentage points in the next fiscal year, he said.

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The Reserve Bank of India may withdraw some monetary stimulus if inflation rises towards the end of 2009, C Rangarajan, chairman of the Prime Minister's economic advisory council, said on Wednesday.

"If inflation pressures develop, monetary authorities may take measures earlier. RBI (Reserve Bank of India) will wait and see how price situation develops in Nov-Dec," Rangarajan said.

The fiscal deficit needed to be reduced by 1 to 1.5 percentage points in the next fiscal year, he said.

"Next year we might have to start the process of withdrawing some of the measures," he said referring to the fiscal stimulus, adding that excise duties needed to be adjusted while the government's expenditure needed to be cut in 2010/11.

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Cut stimulus and restore negative growth!By: Ramanathan AV | 11-Nov-2009 Reply | Forward PM's advisor comment that if inflation raises, then RBI will trim the stimulus given to the Indian industry to tide over the economic cricis and price presurre competition from our competitators, so that healthy growth would trigger the economy, would be a fatal blunder. What is needed is careless import, around 1 cr tonnes of imported qualitiless oils at nil duty for crude and 7.5% for edible against 45% for crude and 52.5% for edible has resulted in loss of customs revenue to the tune of Crores of Rupees without consideration for the demand:supply factor fuells inflation. Not only these imports compete against doemstic production but destroys the indegenous industry. What Government should do is to axe reckless imports, prune the salaries of officials by not filling in the posts of those retired, get higher productitity by posting the efficient, and driving the laggards/dastards, and removing the multiplicity of departments which does the same work; Do away with Populist agenda .

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