Ashok Chawla, department of Economic Affairs secretary has said that the country could expect more sops and interest rate cuts. He said the government is also very close to finalize a relief package for industry like for infrastructure companies as well as exporters.All sectors are affected by the financial crises and the next line of measures from the government would be addressed to exporters and infrastructure companies. Monetary measures are something that the government is open about, top officials in the Finance Ministry say that at present RBI''s steps are sufficient.
However, it is still unclear whether the government will agree to set up a dollar fund for this purpose as the RBI governor is not very inclined towards using India''s forex. Instead, it is likely that a rupee line of credit would be provided for infrastructure companies thro
ugh banks.
The timing of such announcements might possibly be clubbed with the export package. Under it, the government is actively examining the re-installment of interest rate subvention for cheaper credit and a hike in the duty drawback rates, as well as enhancing the DEPB benefits. Along with this, it is also examining a proposal to hike the priority sector lending cap for housing from the present Rs 5 lakh to a bracket of Rs 15-20 lakh.
But the corporates are planning to pick up more dollar loans from abroad, as external commercial borrowings might be disappointing. However, neither the RBI nor the Finance Ministry is in favour of such a move. So, while the relief story is expected to unfold by the end of next week sometime it still remains unclear as to when would RBI cut rates again.
However, it is still unclear whether the government will agree to set up a dollar fund for this purpose as the RBI governor is not very inclined towards using India''s forex. Instead, it is likely that a rupee line of credit would be provided for infrastructure companies thro
ugh banks.The timing of such announcements might possibly be clubbed with the export package. Under it, the government is actively examining the re-installment of interest rate subvention for cheaper credit and a hike in the duty drawback rates, as well as enhancing the DEPB benefits. Along with this, it is also examining a proposal to hike the priority sector lending cap for housing from the present Rs 5 lakh to a bracket of Rs 15-20 lakh.
But the corporates are planning to pick up more dollar loans from abroad, as external commercial borrowings might be disappointing. However, neither the RBI nor the Finance Ministry is in favour of such a move. So, while the relief story is expected to unfold by the end of next week sometime it still remains unclear as to when would RBI cut rates again.
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