October 30, 2009 5:35 PM

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Economic growth will guide review of fiscal stimulus says FM

Finance Minister Pranab Mukherjee said, the government may take a call on exiting fiscal stimulus after reviewing the economic growth in the second and third quarters of this financial year. He will also share his perception on exit strategy at the G-20 Finance Ministers' meeting in Scotland, starting next week. Speaking at the Hindustan Times Leadership Summit in New Delhi, he said, instead of blanket exit strategy for all nations, each country should devise its own plan depending on the economic situation. In its fiscal stimulus measures to perk up the slowing down economy in the country, the government cut excise duty by six per cent, service tax by two per cent in phases and increased planned expenditure. The Reserve Bank has already started the first phase of exiting from monetary stimulus by raising the Statutory Liquidity Ratio, which is the amount of deposits that banks keep in the form of gold, cash and government bonds, by one percentage points to 25 per cent. The Central Bank has also withdrawn certain liquidity measures announced for mutual funds.<br/>

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