Even as the industry clamours for bigger and bolder stimulus packages to tide over the impact of global financial meltdown, the International Monetary Fund (IMF) has said such reliefs should be temporary and without impairing the ability of governments to service public debt.
"Fiscal stimulus packages should comprise predominantly temporary measures... It should not become permanent," the IMF said in a recent paper on "The state of public finances:outlook and medium-term policies after the 2008 crisis".
As regards growing public debt to fund stimulus packages, the paper, released ahead of the G-20 meeting of finance ministers on March 20 in London, said, "The government debt is expected to rise even faster, by over 14 per cent of GDP in 2008-09 in advanced G-20 countries -- the largest since World War-II in any two-year period."
The Indian government has already announced three fiscal stimulus packages since December to boost the industry, reeling under the impact of the global financial meltdown.
The steps announced by the government include across-the-board reduction in excise duties and stepping up public expenditure, as a result of which central government's fiscal deficit is slated to jump to over six per cent from 2.5 per cent of the GDP estimated in the budget for 2008-09.