Stimulus helped economy withstand slowdown, says FM

Finance Minister Pranab Mukherjee today said the fiscal stimulus greatly helped the economy withstand the impact of the slowdown and gave no hint of its possible rollback in the Budget.

"Central excise has been used as a fiscal tool to cushion the impact of the global recession. It is reassuring to note that stimulus measures, including reduction in central excise duty, have had a positive impact on the Indian economy," the Finance Minister said at the Central Excise Day.

Mukherjee also said an impressive industrial growth of 16.8 per cent in December suggests the economy will grow by over 7.5 per cent in 2009-10 and over 8 per cent in the next fiscal.

He said the economy needs to grow by double digits to eliminate poverty and illiteracy.

To blunt the impact of the slowdown, the government had cut excise by 6 per cent and service tax by 2 per cent besides stepping up planned expenditure to provide a Rs 1.86-lakh crore stimulus to the Indian economy.

However, with the economy back on the growth path, speculations are rife that the emergency measures may be be partially withdrawn by raising excise duty in the Budget on Friday.

The Finance Minister, though provided no indication to that effect.