Mukherjee said, “Exiting from the stimulus packages now may not be the correct approach because if the world economy collapses, the depression would be deeper. I am not hinting at anything,”.

Moreover, regarding the interactions with the Japanese Premier Yukio Hatoyama, who was on a visit here, Mukherjee said that he had emphasized on the need to balance economic growth as well as the fiscal deficit. “What I told him was that we shall have to strike a balance between the requirement of the economy and the capacity of the economy to bear this level of fiscal deficit and borrowing.”

However, giving a shy of relief, he said, the stimulus packages would widen the fiscal deficit but this kind of fiscal deficit cannot be sustained for a longer period.

The finance minister Pranab Mukherjee earlier said that the fiscal deficit would not cross the target of 6.8 per cent of the gross domestic product (GDP). With the prevailing trends in the receipts and expenditure, along with better than expected economy performance in the second quarter of this fiscal, it is expected that the fiscal deficit will remain with the estimate of 6.8 per cent.

On the top of this, Mukherjee earlier told in the Parliament that the government will bring down its fiscal deficit to 3% of gross domestic product (GDP) after 2011-12 fiscal. The deficit is set to widen to 6.8% in this financial year to March 2010, after tax cuts and stimulus spending.

Moreover, earlier this week, The Finance Minister, Pranab Mukherjee, today said that the economy could grow by 7.5 to 8 per cent during this fiscal.

Addressing the 104th annual session of industry chamber PHDCCI, Mr. Mukherjee said for the year 2009-10, the Mid Year Review has projected a growth rate of 7.75%, which would be nearly 7.5% to 8% and could exceed the optimistic projection of 7.75%, increase from 6.7% recorded during the year 2008-09. He also said that a 9-10 % growth rate is always been the dream for India and seeing the present situation the road is not far away. During Q2 (July-October) of the current fiscal, the 7.9 % of country’’s GDP raised more than the estimation made.

India’’s fiscal deficit is expected at 6.8 per cent of gross domestic product for 2009/10 (April-March), which is higher than 6.2 per cent of the previous year as the government slashed tax rates and boosted spending.

The economy grew 6.7 per cent in 2008/09, which is slower than 9 per cent or more in the previous three years.

Meanwhile, the agricultural production during 2009-10 is based critically on the performance of the North East monsoon and rabi production. Besides, the sector is also expected to gain support from the ”allied sector” like horticulture, livestock and fisheries.

The manufacturing PMI (purchase managers index) for October and November at 54.5 and 53.0 respectively, reveal the sustained development of the sector although lower than September 2009.

At the same time, Mukherjee said recommendations of the 13th Finance Commission, which submitted its report earlier in the day to President Pratibha Patil, will be reflected in the Budget 2010-11.

President will give the report to Finance Ministry. Further, the ministry will take it up with the Cabinet. Then cabinet will adopt the report and is expected to table it in the Budget session of Parliament.