Date:03/01/2009 URL: http://www.thehindu.com/2009/01/03/stories/2009010360501400.htm

Business

Industry welcomes stimulus package

Special Correspondent

NEW DELHI: Major federations of industry and commerce welcomed the second stimulus package announced on Friday describing it as a set of positive measures aimed at providing relief to all sectors and help give a boost to the growth of the economy.

The Federation of Indian Chambers of Commerce and Industry (FICCI) Secretary General, Amit Mitra, said that by combining monetary and fiscal measures, the package sought to address a number of concerns and restoring business confidence.

The reduction in interest rates, infusion of additional liquidity, aid to export sector, boost to infrastructure sector and easier access to ECBs (external commercial borrowings) and FIIs (foreign institutional investors) were expected to give a boost to the economy.

Underlining that these measures would bring down the lending rate and the reduction in cash reserve ratio (CRR) was expected to add to the banks’ liquidity, Mr. Mitra, however, hoped that banks would lend to the corporate bodies rather than invest in government securities. The restoration of duty drawback rates for select sectors and the extension of Duty Entitlement Pass-Book (DEPB) scheme for one complete year would improve the competitiveness of exporters.

Foreign funds

FICCI expected infusion of foreign funds with the removal of interest cap on ECB and lifting of ceiling on foreign investment in corporate bonds from $6 billion to $15 billion.