Is it time to reduce the stimulus?
With private consumption growing 3.6 per cent versus 18.1 per cent for government in April-September 2009, and investment growth falling to around half, any decision on phasing out has to be taken carefully.
Indranil Sengupta, Economist, India Research, DSP Merrill Lynch Limited
All drivers of growth — household demand as well as corporate investment — are picking up. So a gradual withdrawal won’t hurt
We believe that the government should begin to gradually withdraw last year’s fiscal and monetary stimuli as the economy recovers.
A doctor, after all, has to ask the patient to discontinue taking pills as a patient recovers. In the last upcycle, the People’s Bank of China and the Reserve Bank of India [ Get Quote ] were the first two central banks to follow the US Federal Reserve in hiking rates in mid-2004.
read more http://business.rediff.com/report/2010/feb/17/bcrisis-is-it-time-to-reduce-the-stimulus.htm
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