Buoyed by the prospects of economy bouncing back to 9% economic growth, the Economic Survey suggested gradual roll back of stimulus steps unveiled in the wake of the global financial meltdown.

This, it said would help cut down the fiscal deficit that is estimated at 6.8% of GDP in 2009-10 that was fed by a fall in indirect tax collections and delay in 3G auction.

The Survey tabled in Parliament said that "The fast-paced recovery of the economy underscores the effectiveness of the policy response of the government in the wake of the financial crisis. Moreover, the broad-based nature of the recovery creates scope for a gradual rollback, in due course, of some of the measures undertaken over the last 15 to 18 months.”

It added that this was part of the policy response to the global slowdown, so as to put the economy back on the growth path of 9% per annum.

With the stimulus measures primarily comprising cut in indirect taxes, the Survey said there is likely to be a shortfall in tax collections under these heads.

On the other hand, non tax revenue would also take a hit due to delay in realization of spectrum auction. However, the Survey hoped to rein in fiscal deficit at just about INR 400000 crore, which is 6.8% of GDP with the help of some restraint on expenditure.

(Sourced from PTI)