Govt. declares Rs. 20,000 cr package

The government of India on Sunday declares Rs. 2000 cr bail out package for the economy to check the impact of the global financial crisis. The government clears that India economy is better than the global economy.

This move has been anticipated, the package targets to power exports, housing, auto, small and medium industries and infrastructure sectors through additional funding and guarantees that a total amount of about Rs 35,000 crore, according to media reports. The government has also slashed Cenvat by four per cent across the board to boost demand.

Many sector have been hit due to the global financial crisis. In order to protect the interest of these sectors, the government announced the bail out package. It is very necessary to take more fiscal measures as the Indian economy is reeling under the pressure of global crisis.

The highlights of the Package are:

• Additional plan expenditure of up to Rs 20,000 crores.
• Excise duty reduced across the board by 4 per cent.
• IIFCL authorised to raise Rs 10,000 crores via tax-free bonds.
• PSU banks to announce package for borrowers of home loans.
• Rs 350 crores additional funds for export incentives.
• Back-up guarantee to ECGC for up to Rs 350 crores
• 2 per cent interest subvention for labour-intensive exports.
• Rs 1,100 crores to ensure full refund of Terminal Excise duty.
• Additional Rs 1,400 crores for textile sector under TUF Scheme.
• The guarantee cover for loans to MSME doubled to Rs 1 crore.
• The lock-in period for such collateral-free loans reduced.
• Government depts allowed to take up replacement of vehicles.
• Import duty on Naphtha for power sector eliminated.
• Export duty on iron ore fines eliminated.
• The economy will continue to need stimulus in next fiscal.