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Commerce ministry wants speedy stimulus package

By Rituparna Bhuyan and Prashant K Sahu in New Delhi
December 22, 2008 15:03 IST
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Concerned by the delay in announcement of the second economic stimulus package, the commerce ministry has asked the committee of secretaries headed by Cabinet secretary KM Chandrashekhar for speedy intervention.

Sources told Business Standard the commerce ministry felt that the delay would add to the cost for the government as more and more factories could shut shop.

The concern expressed by the commerce ministry comes in the backdrop of dip in exports in October and November.

The meeting of the panel of senior officials yesterday ended without finalising the proposals that were to be put before the apex committee headed by Prime Minister Manmohan Singh on Saturday. But sources said the package would now be announced in the last week of December or the first week of January.

The final nod to the proposals of the second package -- which was earlier planned to be announced next week -- will be given by the apex committee, which has Commerce Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia as members.

The committee is also deliberating proposals regarding reviewing the import duties for auto components. According to sources, the auto-component sector wants the Customs duty on auto parts to be increased while some auto-manufacturers want it decreased.

The proposals that are being discussed by the CoS include refinancing facility to medium and small and micro enterprises (MSMEs). Other proposals include cheaper home loans in the range of Rs 20 lakh to Rs 30 lakh as well as cheaper auto loans.

The government had announced a series of measures in the first package on December 7, that included increased an across-the-board cut in the excise duty rate and an increased in the Plan expenditure by Rs 20,000 crore (Rs 200 billion).

Cheaper export credit was also provided to sectors like textiles, handicrafts and leather. Also, the government allowed India Infrastructure Finance Company Limited to raise Rs 10,000 crore (Rs 100 billion) through tax-free bonds.

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Rituparna Bhuyan and Prashant K Sahu in New Delhi
Source: source

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