is the time tight

Recent comments of planning commission head, Montek Singh Ahluwalia, that the stimulus package is likely to continue should be welcomed as our growth in true sense is yet to be stabilized.The GDP is above 7% and the inflation of food prise is about 20% which creates a fallacy that the market has more liquidity and needs to be tightened to check inflation but in reality if we withdraw the aid we will commit the same mistake which America did in 1937 and japan in 1996 which led to a longer period of their economic slump .Actually the statistical growth could be illusionary as the growth may be because of inventory bounce.A inventory bounce is actually the inventory stock stored up because of economic slum.The company stops or slows the production until the stock is clear and when resumes production shows a growth in GDP ,this shold be supported by other sources of demand like consumer spending and long term investments for true signs of recovery.Coming back to the inflation its true that it needs to be checked but monetary policies wont help much because inflation here is mainly because of food grains.Mr Ahluwalia says that inflation is likely to come down by next month as he correctly said that supply side and the current stock needs to be managed rightly to curb inflation.With finance ministry to present the budget soon it would be interesting to see the policies which the gov. comes up to boost the growth.