New Delhi: The government of India is bracing up to announce another stimulus package. The proposal is likely that measures could be announced by the end of the week. It also plans to go big on spending, never mind those fiscal deficit numbers.Meanwhile, RBI is likely to pitch in with a CRR and a repo rate cut. The next drop in inflation numbers could encourage the monetary authority to snip key rates again.
Interestingly, a cut in the reverse repo is not on the cards. But the government is expected to step on the gas, as far as spending is concerned. Although, Ministry officials have not quantified the additional spend, labour intensive sectors like gems and jewellery, leather, textiles and auto are likely to receive special attention simultaneously, suggesting public sector banks to go for targeted lending for these sectors. However, the special focus sectorally will also be on NBFC''s and they are expected to get a special line of credit.
Meanwhile, Kamal Nath, the commerce Minister has also indicated that liquidity will not be an issue. It shows that the government plans to keep pump priming the economy to stimulate demand and make credit available at cheaper rates. The minister has also indicated that further duty cuts are possible.
However, Finance Ministry officials say that there is nothing so far on the table. On the contrary, there is pressure from the domestic industry for a hike in the peak customs duty for more protection as commodity prices have fallen globally.
Interestingly, a cut in the reverse repo is not on the cards. But the government is expected to step on the gas, as far as spending is concerned. Although, Ministry officials have not quantified the additional spend, labour intensive sectors like gems and jewellery, leather, textiles and auto are likely to receive special attention simultaneously, suggesting public sector banks to go for targeted lending for these sectors. However, the special focus sectorally will also be on NBFC''s and they are expected to get a special line of credit.
Meanwhile, Kamal Nath, the commerce Minister has also indicated that liquidity will not be an issue. It shows that the government plans to keep pump priming the economy to stimulate demand and make credit available at cheaper rates. The minister has also indicated that further duty cuts are possible.
However, Finance Ministry officials say that there is nothing so far on the table. On the contrary, there is pressure from the domestic industry for a hike in the peak customs duty for more protection as commodity prices have fallen globally.
No comments:
Post a Comment