The Chairman, Economic Advisory Council, to the Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan suggested a partial roll back of stimulus measures to bring in some correction fiscal measures by increasing service tax and excise duties.

Mr. Rangarajan also suggested adjusting the central expenditure and since ST and excise duties are to be increased for this measure, and thus capital spending on infrastructure would not be affected. The announcement had been made just ahead of the budget of 2010-11 in New Delhi.

The government is under severe strain and if the stimulus packages are not partially rolled back it is going to be a matter of great concern for the government in the near future. The government thus will have to take immediate fiscal measures to regain the lost balance and to lower the revenue and fiscal deficits.

For the revenue, the Goods and Service Tax (GST) is all set to roll from April this year. The government had also reduced the service tax and excise duty during the financial meltdown which they now intend to increase back to previous or higher levels. Excise duty had been reduced to 8% from 14% and ST had been reduced to 10% from 12%.