Will the economy be able to manage well if stimulus measures are withdrawn next year?

I will support my argument further with contents of inflation prospects in the economy. Food inflation has already touched 13.68 percent by weekend October 31. Many ingredients are ready to support further rise. Wholesale price has touched the rock bottom from where there is chance of uptrend. Tax giveaway of about Rs.40,000  crores that was responsible to rebound consumers demand in the market will support the inflationary pressure. The burgeoning fiscal deficit over Rs. 4 lakh crores will add file to the fire. Lower interest rates will invite more and more borrowers to have new projects to invest money in the market with time lag of production and productivity. At his hour rural spending by the government will provide financial support to the rural people who will be able to withstand in the market with rising prices of food items.  The government plan to use the funds raised through the sale of its stake in public sector firms to finance social schemes over the next three financial years, a move that will help it bring down the fiscal deficit and also support income generation at the lower level through social projects. Withdrawing stimulus package from the rural segment will make the lower section vulnerable. This people in this  section will have to bear enormous presser with lower incomes in the dynamic market at the other end. The Microsolar Energy Cycle of growth is clearly indicating about the robust inflationary pressure from January 2010. At this hour it will be better for the government to carry on the stimulus programmes in the rural area and  give green signal of withdrawal of certain packages in the urban area.

Microsolar Brain

In the Indian context stimulus pacakages do only what it is supposed to do in normal times meaning we always need stimulus for this economy. Reason being, if we divide the economy based on Keynsian Macro economic model the "targets of the manufacturing(their mission) is not aligned to the general nature of Politics required for the Nation". Also the politics is not aligned to the general needs of the people that is to the collective objectives of the citizen.

Moreover if a person need to be balnced he need to have "welfare" and the politics of the nation don't gurantee or provide that. General nature of politics usualy provide this as their priority.

So we have a three way problem to solve,1) balance for individual citizen to pursue his goals 2) provision to change the political will to align to this need and 3) align Corporate objectives to the changed political will.

As long as this problem of misalignment is solved the "agregation problem" that is the problems faced by citizen as a whole cannot be solved and all our efforts will fail miserbly or will be create inefficient outcomes. So we need stimulus for ever to eternity unless we are willing to change the leadership criteria. I mean the ideas passed from and wrong habits learned during the last 50 years from leadership that cannot think straight need be corrected for good.

In view of the continuing recession in most parts of the global economy it is still not the right time to withdraw support of stimulating demand in the domestic market. India's GDP has already come down. From middle of the year though a positive economic scenario is looking up but this will be not able to sustain in 2010 at least in the first part as per the soalr energy cycle of growth spectrum for 2010 is concerned. In this perspective withdrawal of stimulous package will be harmful for the country