Planning Commission today said there is no case for providing stimulus to the industry to arrest moderating growth as the fiscal deficit is high and may exceed the Budget estimate of 4.6% by about one percentage point.
"I don't think it (slowdown) has happened because of lack of stimulus... What is the case for stimulus. In a sense, there is going to be a stimulus because the deficit will be exceeded," Planning Commission Deputy Chairman Montek Singh Ahluwalia said while speaking at the Hindustan Times Leadership Summit.
He conceded said that the fiscal deficit is likely to be above the Budget Estimate of 4.6% of GDP.
"If you just count the different elements where there is deterioration it may look like one% (more than fiscal deficit budget estimate of 4.6%)... Net effect we don't know yet. But I did say it will be more than 4.6%," Ahluwalia said.
He, however, said that there is no question of going for a stimulus package to boost growth.
"Already the fiscal deficit will be worse than budgeted estimate (of 4.6% of GDP)... How much more I can't say. But there will be savings on expenditure. They (the government) may be able to reduce expenditure," he added.
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The government's fiscal deficit has risen to Rs 3.07 lakh crore, or 74.4% of the Budget estimates, in the first seven months (April-October) of 2011-12, as non-tax revenue growth has declined.
The economy expanded at the slowest pace in 2 years at 6.9% in the July-September quarter of the current fiscal. For the first half (April-September) of the fiscal, the average growth rate is 7.3%.