NEW DELHI: The sops story is over for India Inc, at least as far as the UPA regime is concerned. Setting to rest all specualation about the much-discussed third stimulus package, the government has rejected the industry’s demand for another push to rev up the economy.
Despite senior ministers and government functionaries talking about a third stimulus package, a clear message has been sent out in the corridors of power to set all speculation at rest.
With election mood having set in, the government has decided to focus on politically-sensitive issue of controlling inflation rather than providing concessions to the industry. It is also being felt that there is no time left for further stimulus steps since the final Parliament session of the UPA regime is all set to begin on February 12 and elections are to be notified soon after the session concludes.
“There will be no third stimulus package but we have looked at some of their specific concerns of the exporters especially those which deal with the procedural issues and these are being examined by the Committee of Secretaries,” says commerce secretary, GK Pillai.
The same message is being echoed top officials of the ministry of finance. The big ticket spending that was envisaged during the stimulus packages announced earlier is now being implemented with the Cabinet Committee on Economic Affairs approving national highway projects involving an investment of Rs 16,000 crore last week.
Other steps to implement the measures announced in the two stimulus packages would be rushed, but no more sops are in the pipeline, top officials confirmed. That the focus has now shifted is eveident from the fuel price reduction effected last week, they added. The fuel price cut is expected to bring inflation down to the comfort zone of sub-5% in February.
Among the sectors that are feeling the heat of the slowdown are real estate and housing, steel and auto. However, export industries are expected to see maximum pain as the sector has already seen around one million job losses.
Previously federation of Indian export organization (FIEO) held a meeting with all the top officials of the commerce ministry including commerce & industry minister Kamal Nath, finance secretary Arun Ramanathan and the deputy chairman of the Planning Commission Montem SIngh Ahluwalia.
The key suggestions put forth by FIEO President A Shaktivel were increase in duty drawback and
DEPB rates and interest subvention at 7% across all sectors but the commerce ministry will not fulfill any of these demands. “ We have told the exporters very clearly that there is unlikely to be any duty drawback hikes or increase in DEPB rates,” says Pillai.
Source :The Economic Times