DNA Money Edit: Stimulus package will bolster India's economy

The government’s move to announce a stimulus package to boost India’s economic growth brings cheers to India Inc. After holding a series of meetings in the past few days with some of his ministerial colleagues and senior government officials, Finance Minister Arun Jaitley said the government is working on “measures to bolster the economy”. The fact that the government has ears to the ground and that it is pro-active to bring in measures to shore up the sagging GDP growth surely deserves kudos.

The idea of a stimulus package, the contours of which are still not clear, came about after a review meeting on Tuesday, which was attended by a few ministers and top government functionaries – including Commerce Minister Suresh Prabhu and Railway Minister Piyush Goyal. Jaitley said they will also meet other departments over the next few days, and finalise the package with the blessing of Prime Minister Narendra Modi.

While fixing the growth engine, FM clarified his government was not in favour of lowering taxes on petrol and diesel prices. The government needs revenue to support public spending without which growth will suffer. Former PM Manmohan Singh recently stated that the Indian economy was running on “just one engine of public spending”.

The move to dish out a stimulus package comes at a time when the GDP growth hit a three-year low of 5.7% in the first quarter. Retail inflation hit a five-month high of 3.36% in August. The current account deficit rose to 2.4% of GDP in April-June. The government has to think out-of-the-box and find solutions to turn around the economy and create more jobs in the country.