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Roadmap for gradual stimulus exit in Budget needed
February, 10th 2010

The Prime Ministers Economic Advisory Council Chairman, Dr C. Rangarajan, on Wednesday said the Government should come out with a roadmap for withdrawal of stimulus in the upcoming Budget.

When asked whether the Budget should start the process of exit, Dr Rangarajan told reporters here that What is required is a roadmap towards normalisation.

He said the word rollback is too strong in expression and the stimulus exit has to be a gradual process.

What one is talking about is a gradual transition towards a more normal situation, he said.

In order to help the industry combat the impact of global financial crisis, the Government had provided three stimulus packages resulting in a revenue sacrifice of Rs 1.86 lakh crore.

On Goods and Services Tax, he said any step taken in the Budget that takes the country closer to GST should be a welcome. Rate adjustment for moving towards GST should be attempted in the Budget, he added.

The Goods and Services Tax (GST) will do away with most of the indirect taxes at the Centre like excise and service tax and at the states like VAT and octroi. The tax was scheduled to be implemented from April 1 this year.

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