NEW DELHI: The first part of the stimulus package for different sectors of the economy hit by global meltdown that was to be unveiled by Prime Minister Manmohan Singh on Saturday has been deferred to Sunday.
The package will be announced after Manmohan Singh returns from his one-day visit to West Bengal.
The Prime Minister, who set up an apex group under his chairmanship last month, had promised a series of measures to boost the economy severely hit by global meltdown.
The package is likely to contain several fiscal measures such as cut in excise duty on some products and massive funding for infrastructure.
As inflation came down to single digit (8.40) in November after it peaked to 12.91 in August, the Centre slashed the prices of petrol and diesel. Also the Reserve Bank of India cut the repo rate and reverse repo rate by 100 basis points each to 6.5 percent and 5 percent respectively.
But India Inc has demanded similar cuts in the cash reserve ratio and statutory liquidity ratio.
Describing the RBI effort as “a good start in the correct direction,” the FICCI said: “The Central bank could have gone a step further by cutting the CRR and SLR rates to send a stronger signal of liquidity support to corporates.’’ Echoing similar demands, Sajjan Jindal, President of Assocham, said: “The CRR and SLR should also be reduced by 3 percent and 4 percent respectively.
Although the RBI on Saturday reduced repo and reverse rate by 100 basis points, it is not enough now as the economic situation calls for drastic fiscal measures.” Assocham also demanded that the Centre should abolish Central sales tax currently at 2 percent, bring down excise duty to 8 percent across the board and curtail it to 4 percent for industries that are under stress, including automotive, steel and cement.
Assocham also wanted reduction in personal income tax by 10 percent to boost consumption.