In the forthcoming union budget which is scheduled to be announced on July 6, 2009, it is expected that the government may announce more fiscal stimulus measures as the sustained recovery in the economy would require improvement in manufacturing sector as well as the revival in domestic demand, research firm Dun & Bradstreet said.
Regarding the interest rate, the research firm said that the RBI policy rates are already at low level and given some potential inflationary threats, RBI is unlikely to lower the policy interest rates in the near term.
Hence, it said that the government and RBI are likely to use the moral suasion as a tool to induce the banks to slash BPLR.
In order to give a boost to the slowing economy, the government came out with three stimulus packages in December as well as January and in the interim Budget by reducing tax and providing incentives to various sectors.
Meanwhile, RBI also took monetary easing measures since October by infusing more than Rs 4 lakh crore into the system. Further D&B said that the resilient growth rate during fourth quarter of the last fiscal as well as rebound in the industrial production provide a ray of hope for recovery in second of current fiscal.
The Indian economy advanced by 5.8 per cent in the last quarter of 2008-09 while on the other hand, the industrial growth turned positive for April at 1.4 per cent.
Moreover, it said that the inflow of foreign fund are expected to resume, providing some support to the domestic investment as well as industrial activity going forward.
Regarding the interest rate, the research firm said that the RBI policy rates are already at low level and given some potential inflationary threats, RBI is unlikely to lower the policy interest rates in the near term.
Hence, it said that the government and RBI are likely to use the moral suasion as a tool to induce the banks to slash BPLR.
In order to give a boost to the slowing economy, the government came out with three stimulus packages in December as well as January and in the interim Budget by reducing tax and providing incentives to various sectors.
Meanwhile, RBI also took monetary easing measures since October by infusing more than Rs 4 lakh crore into the system. Further D&B said that the resilient growth rate during fourth quarter of the last fiscal as well as rebound in the industrial production provide a ray of hope for recovery in second of current fiscal.
The Indian economy advanced by 5.8 per cent in the last quarter of 2008-09 while on the other hand, the industrial growth turned positive for April at 1.4 per cent.
Moreover, it said that the inflow of foreign fund are expected to resume, providing some support to the domestic investment as well as industrial activity going forward.
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