Fast-growing economies can begin stimulus withdrawal: IMF

As India unveils Budget tomorrow, the International Monetary Fund has prescribed that fast-growing emerging

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markets can start withdrawing stimulus packages so that large public debt could be reduced.

The advice is similar to the one offered by the Economic Survey and the Finance Commission to the Indian government.

"Fast-growing emerging markets can start tightening now," the multilateral lender said in a statement on Wednesday.

It noted that the financial crisis has resulted in rise in public debts and called for strategies to reverse the trend.

"As the crisis winds down, it is now more urgent that policymakers formulate, communicate and begin to implement strategies for exiting from crisis-related intervention policies," the IMF said in its paper 'Exiting from Crisis Intervention Policies'.

The Economic Survey tabled in Parliament today has recommended a gradual roll back of stimulus.

"...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 15-18 months... So as to put the economy back on to the growth path of nine per cent annually," the Survey said.

The 13th Finance Commission has asked the government to adopt a "calibrated" strategy for withdrawing stimulus.

Last week, the Prime Minister's Economic Advisory Council had also suggested partial roll back of stimulus measures.

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