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Exit stimulus

The government reportedly plans to exit from the fiscal stimulus of 2008-09 delivered through cuts in excise duties and service tax. This is welcome. Just as boosting demand was what the economy required when the global financial crisis struck, the need now is to cut excess demand posed by government consumption. That means fiscal consolidation. An uncertain global environment should not hold back the government from reversing the cut in indirect tax rates in Budget 2012. 

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