New Delhi: A stimulus package for the economy to be announced tomorrow by the government and Reserve Bank of India (RBI) will not be a one-off assistance, but would be the first in a series of measures to help sectors hit by the global slowdown.
“This will not be a single package. There will be a first package, second and third part of it,” Commerce and Industry Minister Kamal Nath said on the sidelines of a meeting of the India-Russia CEOs’ Council.
Also tomorrow, RBI is expected to announce a cut in the short-term rates in Mumbai signalling banks to reduce interest rates on a host of interest-sensitive sectors like automobile, real estate and infrastructure.
Asked about the details of the stimulus package prepared by the Committee of Secretaries in consultation with the RBI, Commerce Secretary G.K. Pillai said: “Let the Prime Minister announce it tomorrow.”
Pillai said on Wednesday that Rs15,000 budgetary support would be extended to infrastructure projects, while sops worth Rs2,000 crore would be extended to the recession-hit exporters.
The government is also set to cut excise on commercial vehicles, whose manufacturers have reported a sharp decline in sales in November.
Exports too declined by over 12% in October and the target for the fiscal is being revised downwards to $175 billion from $200 billion.
A government survey of 121 export-oriented manufacturing units indicated 65,000 job cuts in the last three months with worsening of the the global economic situation.
Prime Minister Manmohan Singh, who has since taken charge of the finance portfolio, chaired a meeting of the apex committee on 2 December to discuss the package.