India Inc did not give an encouraging thumbs up to interim budget and other stimulus packages announced by the govt. Though it is hailed by industry chambers, they stressed that an interest rate cut by RBI was imperative to spur investment, consumption and reduce pressure on bond yields due to increased government borrowings. Borrowing and deficit financing together will push up the deficit to more than 10 per cent of GDP by next year. This is a good politics, but bad economics. Announcing the third stimulus package in short succession to boost demand, the UPA government announced fiscal sops amounting to 30,000 crore Rupees, the most significant being an across-the-board two per cent cut in central excise duty and service tax.
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