Govt to unveil second stimulus package today
The government will unveil a second stimulus package to give the economy traction through measures aimed at aiding specific sectors, including auto, realty and small and medium enterprises.business Updated: Jan 02, 2009 14:20 IST
The government on Friday will unveil a second stimulus package to give the economy traction through measures aimed at aiding specific sectors, including auto, realty and small and medium enterprises.
It had on December 7 announced a multi-billion package to prop up demand in all these segments, besides giving a push to infrastructure financing. The first package was aimed at bringing down the price line, evident from the four per cent across-the-board cut in excise duty on manufacturing sector.
Last month's move has led to cheaper auto prices, cement, steel and many food items giving the some relief to aam admi, although it had a revenue implication of about Rs 8,000 crore for the exchequer.
The RBI has separately infused Rs 3,00,000 crore liquidity into the system by way of cuts in key policy ratios - CRR and SLR.
In addition to this, RBI also has provided a Rs 11,000 crore refinance window to National Housing Bank and the Small Industries Development Bank of India in a bid to encourage lending to housing and SME segments.
The government felt the need for a second package as industrial output slipped into negative zone for the first time in 15 years in October. The Index of Industrial Production fell 0.4 per cent during that month.
Elsewhere, exports have also shrunk for two months in a row, with November figures showing a 9.9 per cent decline.
Aside from fiscal stimulus, it is expected that RBI may also come out with rate cut announcements ahead of its policy review on January 27.