India cannot have policies that discourage domestic savings: FM

Finance Minister says India cannot have policies that discourage domestic savings. A 4% farm sector growth is needed for 9% economy growth. The stimulus packages have costs the government Rs 2.14 lakh crore. He will use more measures to boost GDP. He is aiming at 8-9% growth in FY10.

He recommends IT deduction for processing poultry, sea food products. He advises legal guardian to get tax deductions on education loans. Also, coal bed methane output in new auction to get tax sops.

RBI Report says that January-March inflation is at 5.4%. The pressure may fall if global recession deepens and if farm growth stays unaffected. The report says that the inflation is firm which shows price pressure on supply constraint, CPI staying inflexible, fading of base effect, upward WPI momentum, global recovery possibility, high MSP, delayed rains and stimulus package impact.

It says that there will be signs of positive numbers by FY10 end. Various CPI indices will remain in 8.6-11.5% band. About the state of the economy, the report says that the fiscal gap is large amid subdued economic growth. States revenue gap is seen at 0.4% in FY10. The central bank will finance the fiscal gap via market borrowings. Loan growth is seen below 20% for FY10, the report added.

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