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The
Indian economy needs more stimulus in the next
fiscal to counter the impact of global economic
slowdown, Planning Commission Deputy Chairman
Montek Singh Ahluwalia said today.
"We
need a little more stimulus in 2009-10. But there
are certain issues which have to be taken up,"
Ahluwalia said on the sidelines of a function
here.
About
the GDP growth projection by the Planning
Commission, Ahluwalia said multiple models have
been used to derive the figures and have been
suggested to the Prime Minister.
"We
have sent a note to the Prime Minister. Planning
Commission doesn't have any projection. What we
said to the Prime Minister-- we used multiple
models to know what is likely to be growth rate
next year," he said.
"There
is certain base level of growth which we thought
was around 9 per cent. Then you knock off from the
growth the affects of shock. Then we add to it the
affect of the positive stimuli... So there are
different numbers depending on the affects of
shock and stimulus measures," he added.
Earlier, Ahluwalia projected a growth rate
slightly less than 7 per cent in the current
fiscal and the next fiscal.
"We
are likely to get a growth rate less than 7 per
cent... Between 6.5 and 6.7 per cent in 2008-09,"
Ahluwalia had said.
On
market borrowings impacting the interest rate,
Ahluwalia said, "If you borrow it can only raise
the interest rate for any given level of
monetisation. Markets borrowings are not zero
anyway." Market borrowings, he said, "has always
been market borrowings and there will be market
borrowings."
"The
impact of the exchange rate is the function that
whether monetary policy accommodates the borrowing
or not. So its not that market borrowing increases
and interest rates go up. It is based on how much
you borrow and tighten and interest rates will go
up," he added.
Earlier addressing a function on "Competition and
Regulation in India" by CUTS international he
suggested assessment and ranking of state
electricity regulatory authorities by the industry
body CII or other bodies and replicating it in all
states based on best practices.
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