To beat the effect of global financial meltdown, the government may have to release another round of stimulus package in the next fiscal beginning from April 01 as the ongoing fiscal deficit may go broader in the next year too, said Planning Commission Deputy Chairman Montek Singh Ahluwalia.
Speaking on the sidelines of a function in New Delhi to felicitate Nobel laureate Prof. Amartya Sen on his 75th birthday on Friday, Mr. Singh said: “The need for fiscal stimulus will not end this fiscal and will go beyond that.”
Projecting the gloomy picture of fiscal deficit, he said that the gap of fiscal package would be much more than budgeted.
He, however, emphasised on the implementation of the stimulus package correctly, so that the allocated additional funds must be spent. For this, ‘the plan panel was working on what the plan position should be for the next year,’ he added.
Citing on fiscal deficit, Montek said that plan panel has made it clear that fiscal deficit would be broader in the next financial year as till October, it has already reached to substantial high. ‘The government will report that to Parliament at appropriate time and nobody is saying that we should stick to fiscal deficit target,’ he said.
Earlier on Dec 7, the Prime Minister Manmohan Singh had announced a ‘multi dimensional’ fiscal stimulus package of additional Rs 20,000c-crore expenditure plan to meet the splurge on construction of roads, ports and other infrastructure, and also slashed excise duty by 4% to stimulate demand and boost economic growth.