The Hindu : Business : More sops for exports, realty sector on anvil

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Friday, Dec 26, 2008
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Business

More sops for exports, realty sector on anvil

Sandeep Joshi

The main focus of the package will be to generate jobs

Centre committed to safeguard SMEs’ interests
RBI can go in for more rate cuts to ease lending

NEW DELHI: With the recent stimulus package failing to have the desired impact to check economic slowdown, the Centre could soon announce some more measures to boost confidence in the Indian industry and help flagging economy to come out of the gloom. While the Government is busy preparing yet another economic package to come to the aid of the worst-effected sectors, particularly exports, real estate and the automobile industry, the Reserve Bank of India could also announce more cut in rates and nationalised banks make more loans available to the housing sector.

Giving a glimpse of the things to come, Union Commerce and Industry Minister Kamal Nath said the Centre was considering more sops for exports and real estate sectors that have been hit hardest in the current economic slowdown. Similarly, some relief measures were likely to be announced for small and medium sector enterprises (SMEs).

To discuss the package for the industry, Prime Minister Manmohan Singh, who also holds the portfolio of Finance, held a high-level meeting on Wednesday where apart from Mr. Kamal Nath, Planning Commission Deputy Chairman Montek Singh Ahluwalia was also present.

Mr. Kamal Nath indicated that the Government could also go in for more cut in tax and duties on some more products to boost demand, as was dome recently in the case of the automobile sector. The main focus of the second package would be to generate employment and boost new confidence in the economy.

Asserting that the government was committed to safeguard the interests of SMEs and the domestic industry that were worst affected in the present gloomy scenario, Mr. Kamal Nath said these sectors would be given priority while lending money, while some cut in taxes for them could also be in the offing. About the Reserve Bank of India, the Minister said the central bank could go in for more rate cuts to ease lending and make more liquidity available in the market. It could further cut CRR (cash reserve ratio) to help banks lend more.

Similarly, nationalised banks could raise the upper limit to cheap home loans from Rs. 20 lakh to Rs. 30 lakh after demands from the badly-hit realty sector. Recently, government banks had reduced home loan rates to 9.25 per cent for loans up to Rs. 20 lakh and 8.5 per cent for loans up to Rs. 5 lakh.

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