Indian Government announces fiscal stimulus package

The government on Sunday unveiled a Rs 300,000 crore ($60 b) package to pump the economy with specific measures for various sectors,to contain the impact of the global financial crisis on India.

The amount is to be spent over the next four months on a host of areas,such as exporters, housing, infrastructure and textiles. A 4% cut in Value Added Tax has also been announced to help the corporate sector in general.The measures for exporters include an interest support of two percent for labor intensive sectors like textiles and handicraft.

This apart, import duty on naphtha for use by the power sector is being reduced to zero, while export duty on iron ore fines will be eliminated, and reduced to five percent for lumps.

In a push to the automobile sector, government departments have been allowed to replace vehicles within the allowed budget, with a major relaxation in the time-consuming procedures.

Instructions have also been given to state-run banks to unveil a scheme under which borrowers for houses under two categories - up to Rs 500,000 and up to Rs 2 million will get special incentives.