The economy has started moving upward on two stimulus packages in thelast fiscal, but scanty rainfall this year may play spoilsport, the governmenttold the Lok Sabha today.

“The economy has started moving slightly, but I still am not quite sure becauseother problems may come from adverse impact of scanty rainfall,” FinanceMinister Pranab Mukherjee said during Question Hour.

“My colleague, the agriculture minister (Sharad Pawar) is making theassessment. We are also making the assessment, but this is a problem and it isa reality and we are trying to handle it,” he said, replying to a question onslowdown of credit between September 2008 and June 2009.

When the industrial crisis engulfed developed countries and the financialmeltdown became a major financial crisis all over the world, it had its worstimpact, the minister said adding that credit is required for investment, forcarrying businesses and using it for productive purposes.

He said these activities were coming down during the crisis period. A number ofsteps have been taken by the government like two stimulus packages in Decemberlast year and January this year, he said adding that the movement of economywas not just like “switch off or switch on”.

“Even if we take action today by adjusting the credit policy, it will take somemore time to get its full impact on the overall economy,” Mukherjee said.

Mukherjee said the main reason for deceleration of credit growth was sharpslowdown in growth of the economy during the latter half of 2008-09, with boththe industry and export sector recording decline for several months.