Finance minister Pranab Mukherjee said on Wednesday that the economic recovery was still not

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broadbased. It was still dependent on the stimulus packages.

Therefore, though he was tempted in the budget to roll back the packages, he did not do so. He said stimulus measures would remain until all affected sectors of the economy benefited from the recovery. Mukherjee was addressing a CII meeting in the capital.

“Recovery continues to be driven by government stimulus spending, and is not completely broadbased,” he said.

Mukherjee hoped that growth in the fourth quarter would be better than in the third when the rate had dipped to 6 per cent.

The dip reflected the sharp decline in agriculture growth because of the drought and a negative rate in government spending. “But I do expect that in the fourth quarter, GDP growth will pick up again,” he said. The rabi crop would come to the aid of the economy.

In an interactive session after his speech, replying to a question on short-term measures to beat inflation, Mukherjee said the very high cost of intermediation between farm and retail points was the reason for soaring prices.

“How to reduce it is part of the terms of reference of the group of chief ministers, the agriculture minister and myself, instituted by the prime minister.” He recalled his budget statement which had said agriculture required more competition.

On tax reforms, he said it was a central agenda for the coming year. The objective was to bring about “dramatic” changes in administration, transparency and simplicity. Besides, it would widen the tax base and increase the tax-to-GDP ratio.

On the stated target of ushering in the tax code and the goods and services tax by April 1 next year, Mukherjee conceded that forging a consensus on the issue among 28 states had been difficult. The empowered committee of the finance ministers of states had, however, narrowed down differences.

Mukherjee listed infrastructure, research & development and renewable energy as the three key areas of growth.

In reply to another question, Mukherjee said he could appoint a task force to arrive at an acceptable definition of infrastructure.

The CII meeting was attended, among others, by Azim Premji, Chanda Kochhar, Naina Lal Kidwai, Rahul Bajaj, Pramod Bhasin, Pawan Goenka and Subodh Bhargava.