PSU banks to hire 85,000

“It is our intention to have a gradual and sequenced exit from stimulus, keeping in focus long-term fiscal sustainability concerns,” Finance Minister Pranab Mukherjee said.

In the Budget for 2010-11, the government started exiting from stimulus measures, given since December 2008 to spur economic growth impacted by the global financial crisis, by raising excise duty from eight to ten per cent. The government began withdrawing stimulus measures to bring down fiscal deficit which has crossed 6 per cent in 2008-09, double of what was mandated by the Fiscal Responsibility and Budget Management Act.

In 2009-10, fiscal deficit widened further to over 6.5 per cent, but is now pegged at 5.5 per cent of GDP this fiscal.

Mukherjee said fiscal consolidation is accordingly caliberated to be supportive of growth in the medium-term and is broadly in line with the recommendations of the 13th Finance Commission. The 13th Finance Commission has laid a roadmap of reducing fiscal deficit to 5.7 per cent of GDP this fiscal, 4.8 per cent the following year, 4.2 per cent in 2012-13 and 3 per cent next year.