Stimulus withdrawal must be gradual: Rangarajan

MUMBAI: Amid speculation of the government withdrawing stimulus, Prime Minister's economic advisory council chairman C Rangarajan said the exit measures must be gradual.
"It (exit measures) should be calibrated in a manner that stimulus in the economy should continue...at the same time, some adjustments will be made (to bring down fiscal deficit)," Rangarajan told reporters when asked about the possibilities of the government withdrawing stimulus measures
Fiscal deficit for the current financial year is pegged at 6.8 per cent of the GDP as against 6.2 per cent in the previous fiscal, as a result of a slew of stimulus measures the Centre announced the since the breakout of the global economic crisis late 2008 triggered by the collapse of US investment banking giant Lehman Brothers in September 2008.
The stimulus withdrawal should be gradual, systematic and in a calibrated manner so as not to hurt the economic recovery, the former RBI governor said.
"The process of exit (from the fiscal stimulus) must be gradual, coordinated and must not be sudden...it should not disrupt the economy," Rangarajan said.