The Planning Commission has said the right time to withdraw the stimulus packages given to the industry to combat the impact of global slowdown will be during the next financial year.
"Neither fiscal nor monetary policy needs to be changed during the current fiscal year, and the time to make further adjustments to one or both of these instruments will be in the next fiscal year," Planning Commission Deputy Chairman Montek Singh Ahluwalia said in an interview.
The changes in fiscal policies will be announced only in the next year's Budget, he said, pointing out that the government will not be looking at pushing economic growth through fiscal expansion. Stock markets went into a downward spiral earlier this month after Prime Minister Manmohan Singh announced that stimulus measures would be withdrawn next year, but Finance Minister Pranab Mukherjee later said that the tonic to the economy would continue till there were firm signs of recovery in the developed world.
"I think you want to avoid any impression that we are looking for a growth that is stimulated by steroids i.e. more and more fiscal expansion ...we cannot afford it -- it would be the wrong thing to do," Ahluwalia added. On inflation, the Planning Commission deputy chairman said the government needs to tackle price rise in food items by a better public distribution system and speeding up supplies.