FICCI asks Govt. not to withdraw its stimulus until strong recovery.

Amid the raging debate over the timing of withdrawal of the stimulus packages, industry body FICCI on Tuesday asked the government not to roll those back in the Budget 2010-11 as the economic recovery is at a nascent stage.

In a pre-Budget meeting with Revenue Secretary P V Bhide, a FICCI delegation also asked for more fiscal sops in the Budget to spur economic growth.

It specifically sought more tax concessions on housing loans, fiscal incentives for affordable housing, minimising cascading effect of the dividend distribution tax and applying peak rate of personal income tax to Rs 10 lakh a year.

A chamber delegation, led by president Harsh Pati Singhania, also suggested that the RBI should not squeeze liquidity as that would not help contain inflation much and choke growth.

The delegation asked the government "to tread with caution" with regard to the rolling back of the stimulus.

"We would like the fiscal stimulus, because of which the economy recovered, to continue for some more time. We have suggested they should wait for six months into the coming financial year, take stock of more quarterly economic results and then think of reversing stimulus," Singhania told reporters after the meeting.

If excise duty cuts were taken back at this stage, he said, it would further fuel inflation.

What do you think, Should Government withdraw its stimulus fiscal policy now or wait for an impact till economy recovers?