Govt readies stimulus measures for economy
SLOWDOWN BITES Thrust on MSME, infrastructure, banks and jobs
NEW DELHI: The government’s expected measures to revive a stuttering economy could mainly target the MSME sector and involve a re-look at public-private project norms to boost investment without breaching its fiscal deficit target for the year, officials involved in the process told HT.
Besides, the government is looking at recapitalisation of banks, issuing infrastructure bonds, and a package to boost manufacture of electric vehicles in India.
Different ministries are working together to chalk out measures to rev up the ailing economy, once hailed as the “only bright spot” in the world. In a series of meetings over three days since September 16, Union finance minister Arun Jaitley met ministers Suresh Prabhu and Piyush Goyal, along with officials from the ministries of finance, rail, commerce, NITI Aayog and PMO.
Earlier this week the finance minister was quoted as saying that the government has taken note of the economic indicators, and that measures would soon be taken to address them.
“I have had a series of discussions with some of my ministerial colleagues, secretaries and other experts within the government,” Jaitley told reporters after a cabinet meeting on Wednesday. He refused to divulge details as the plan would first be presented to Prime Minister Narendra Modi.
India’s economic growth slumped to a 3-year low of 5.7% in the April-June quarter, which many experts attributed to last year’s demonetisation of 500 and 1,000-rupee notes.
The MSME sector has been in focus as it’s still reeling under the effects of demonetisation and GST. Sources said the government’s help could be in the form of doubling the working capital requirement norm from 90 to 180 days. This means that they will have 180 days to return their working capital borrowings from financial institutions.