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Centre’s package for boosting economic sectors soon

NEW DELHI: The government is working on a fresh package of measures to stimulate various sectors of the economy which are facing a slowdown in the wake of the deepening global financial crisis.

The stimulus package is to be announced by the end of this week which is being prepared on the directions of Prime Minister Manmohan Singh.

Apart from easing of key policy rates by the Reserve Bank of India (RBI) to make cheaper bank credit available to the industry as also provide home and car loans at lower rates of interest to boost the real estate and auto sectors, the package is likely to include specific fiscal incentives to help the exporting community and the labour-intensive industries such as textiles, leather, gems and jewellery and other handicraft products.

The nitty-gritty of the package was discussed here on Tuesday late evening at a meeting of the apex group chaired by the Prime Minister. Among others, the meeting was attended by Planning Commission Deputy Chairman Montek Singh Ahluwalia and Home Minister P. Chidambaram who moved from the Finance Ministry to his new assignment on Monday.

According to an official statement here, the apex group at its meeting discussed in detail the measures required to counter the economic slowdown. “Based on his directions, a package of measures is being prepared which will be finalised and announced by the end of the week,” it said.

While the global downturn has already thrown a number of developed countries in the Euro zone, Sweden and Japan into recession, the U.S. is now understood to have been in a recession since December 2007, according to its economic think-tank. With this, the prospects of the Indian economy turning around by the middle or late 2009, as was being projected earlier, appear uncertain. In the event, even as the government and the RBI have projected a GDP (gross domestic product) growth of about seven to eight per cent for the current fiscal, the need for a fresh package of measures has become all the more necessary in view of the recession in the U.S. which is expected to last through 2009.

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