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Tuesday, August 9, 2011

INDIAN ECONOMY: No need for stimulus to combat impact of crisis: Rangarajan!


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PTI / The Hindu / NEW DELHI, August 9, 2011.

Chairman of Economic Advisory Council to Prime Minister Dr. C. Rangarajan during a press conference in New Delhi on Monday.
Chairman of Economic Advisory Council to Prime Minister Dr. C. Rangarajan during a press conference in New Delhi on Monday - PTI.

Prime Minister’s economic advisory panel has said there was no need for any stimulus package to help the industry tide over the impact of the crisis following downgrade of the U.S. credit rating by Standard and Poor’s.

“I don’t think industry needs any fiscal stimulus,” PMEAC chairman C. Rangarajan told PTI, when asked whether fiscal incentives would be needed to help the industry to combat the impact of the global crisis.

Echoing similar views, Yes Bank President and Chief Economist Shubhada M. Rao said, “The U.S. downgrade is not expected to impact Indian industries in a significant manner,” adding, “as such, we do not expect the government to consider doling out any fiscal stimulus package for the industry”.

Industry, however, have started clamour for stimulus to deal with the fallout of the global financial crisis following lowering of the sovereign rating to AA+ from AAA by Standard and Poor’s.

“A slow pace of recovery in the US could also prompt hard hit sectors in India to call for another stimulus package by the government to boost investments and demand”, said Assocham Secretary General D.S. Rawat.

May be no stimulus is required but until and unless the local Oil Prices are reduced in tune with the World Oil Prices, the economy will not look up!


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