Stimulus must stay on, says India Inc

Briefing reporters, Federation of Indian Chambers of Commerce & Industry President Harsh Pati Singhania here, after a meeting of the chambers executive committee, the economic recovery currently being witnessed was in great measure was primarily as a result of the stimulus package. Any withdrawal of the incentives in an effort to tame inflation would only jeopardise the economic recovery, Ficci warned.

Pointing out the encouring GDP, industrial production and core sector performances in recent months are pointers to an economic recovery,  Singhania said, it was imperative to recognise that these are early stages of recovery would take time to consolidate the gains. “Till that happens, any move to withdraw the stimulus would only have grave consequences for the economy.

Ficci said any move by RBI to tame inflation through tightening monetary policy would impact growth and impinge the industrial sector’s performance as it would suck out liquidity from the economy crucial to bolster demand and spur growth. RBI should desist from such moves till the economy returns to eight per cent growth mark and maintains the same for at least two consecutive years, Singhania said.