Planning Commission Deputy Chairman Montek Singh Ahluwalia and the Finance Ministry brass are believed to have met Prime Minister Manmohan Singh to discuss the modalities of the second stimulus package, which could come as a New Year gift for industry.
The meetings assume importance with talks of a second stimulus package by the Government and rate cuts by the RBI in the next few days to boost economic growth and slackening demand as well as meet the shortage of funds due to the global slowdown.
Ahluwalia said, "We are trying to co-ordinate a number of different steps. And I hope in the next few days we will be ready to make an announcement (about the second stimulus package)."
Ahluwalia had also said with the inflation rate coming down to almost half its peak of 12.91 per cent in August and the economy
struggling to achieve a solid growth rate, there is scope for easing monetary policy. "It is clear at the moment that the economy is growing below its potential and inflation is definitely on its way down. And these factors would suggest that there is scope (for easing monetary policy)," he added.
Pointing to the need for a stimulus package for the next fiscal also, Mr. Ahluwalia noted that the global economic situation was going to be worse in 2009 and, therefore, the government’s objective was to prepare a suitable fiscal strategy for both this year and the next. “We are working...the stimulus is not just for this year,” he said.
Mr. Ahluwalia was, however, quick to point out that the stimulus package for 2009-10 would be relevant for the new government. “We are working on the next year’s package. It will only be relevant for the new government. If we have a vote-on-account, the government can announce its intentions,” he said.
Sectors to benifit from the package:
Source: Economictimes The Hindu
