FM to begin pre-Budget talks on January 5

Finance Minister Pranab Mukherjee will kick-start the pre-Budget consultations on January 5, with industry leaders getting the first opportunity to present him their wish-list that includes continuation of stimulus.

Mukherjee has called industry representatives, mainly heads of three apex chambers - CII, Ficci and Assocham — according to industry sources.

They said the industry was apprehensive that the government may withdraw the stimulus in the Budget for 2010-11 in the face of growing fiscal deficit, pegged at 6.8 per cent of the gross domestic product for the current fiscal.

Mukherjee has already stated that wide gap between the government's revenue and expenses is not sustainable. However, he was against a sudden withdrawal of the packages.

As part of the stimulus packages to revive the economy after being hit by the financial crisis, the government had injected Rs 2,22,000 crore in the economy.

Largely helped by the stimulus, the industrial growth accelerated back to over 10 per cent for the month of October. The growth in factory output had dipped to 1.4 per cent in April, the opening month of the current fiscal, under the impact of the global slowdown.

The industry leasers are also likely to press for continuation of the soft interest rates regime despite food inflation almost touching 20 per cent. They argue that food inflation is a seasonal phenomenon and not related to interest rates.

The Finance Minister would be holding wide-ranging pre-Budget consultations with stakeholders, including trade unions, farmers, economists and bankers.

Since last year, he has also started meeting the state finance ministers in the run-up to the Budget.