Health Plan: Mega booster dose for economy to be unveiled today

NEW DELHI: The industry booster package expected on Saturday is likely to include a reduction in bank rates, lines of credit for the infrastructure and housing sectors, excise duty cuts for commercial vehicles, easing of external commercial borrowing norms and measures to restore export growth, especially in labour-intensive sectors that have been worst affected by the global meltdown.

���This will not be a single package. There will be a first package, second and third part of it,��� commerce & industry minister Kamal Nath told reporters on the sidelines of a meeting of the India-Russia CEOs��� council on Friday.

The stimulus package for industry ��� battling a global demand slowdown and credit squeeze ��� will be provided in tranches. The first tranche, to be announced by prime minister Manmohan Singh and RBI governor D Subbarao on Saturday, will be followed by two other sets of incentives to be announced at a later date, commerce & industry minister Kamal Nath said.

RBI is expected to announce a cut in both repo rate ��� the rate at which RBI lends to banks ��� and reverse repo rate ��� the rate at which banks park excess funds with RBI ��� by 100-200 basis points, urging banks, in turn, to reduce their rates. Reduced interest rates is expected for the housing, automobile and infrastructure sectors.



Special lines of credit could be provided for housing and to non-banking financial corporations to fund infrastructure projects. As much as Rs 15,000 crore is estimated to be spent on boosting infrastructure, sources said.

Exporters of traditional and labour-intensive goods such as textiles, handloom, leather, gems & jewellery and marine products are likely to get a booster doze of Rs 2,000 crore. This will include higher input duty reimbursements, service tax refunds, counter-guarantee on insurance cover against defaults, more funds under export promotion and market development schemes and faster refund of terminal excise duty and pending payments of duty drawback and interest rate reimbursement on textile upgradation fund.

Exports declined by 12% in October this year owing to cancellation of orders and slowdown in credit flow. The export target of $200 billion set for the fiscal is now unlikely to be met.