December 30, 2009 5:39 PM

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Immediate withdrawal of stimulus package not good for economy: FM

India has cautioned against immediate withdrawal of stimulus packages by governments across the globe as it may lead to collapse of the world economy again. Finance Minister Pranab Mukherjee said at a Corporation Bank function in New Delhi that immediate coming out of the stimulus package may not be the correct approach. He said if the world economy collapses again, the impact would be deeper.The Finance Minister said he has told Japanese Prime Minister that countries have spent huge amounts of money in stimulus packages to help their economies resulting in high fiscal deficit in almost every country and larger borrowings which have propensity to leave little resources to the private sector. He said, as far as the Indian economy is concerned, stimulus packages are poised to widen the fiscal deficit to 6.8 per cent of GDP this fiscal. Mr Mukherjee reiterated that this kind of fiscal deficit cannot be sustained for a longer period.

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