'Prolonged period of stimulus is bad for economy'

Prolonged period of fiscal stimulus is bad for the normal recovery of an economy, IDBI Bank Chairman and Managing Director Yogesh Agarwal has said.

“The continuation of stimulus beyond a point would hamper normal recovery of an economy,” he said addressing a session organised by Lucknow Management Association (LMA) on ‘Imperatives of double digit growth post recession’ here.

He noted that RBI had already started withdrawing from easy monetary regime by hiking the CRR by 75 basis points. Agarwal expressed concern at the huge fiscal deficit due to the stimulus packages announced to rev up the economy.