Industry happy, but says more could have been done

December 7th, 2008 - 9:52 pm ICT by IANS  

Manmohan SinghNew Delhi, Dec 7 (IANS) Indian inustry welcomed the Rs.3,000-billion fiscal stimulus package announced by Prime Minister Manmohan Singh Sunday, but said more could have done to increase growth. “The fiscal package is pointing in the right direction, but could have done even more of stimulation to increase the growth trajectory,” Federation of Indian Chambers of Commerce and Industry (Fici) secretary general Amit Mitra said in a statement.

“The package has enough punch to restart the overall economic activity if all pipeline and new infrastructure projects swing into implementation with a kitty of Rs.300,000 crore (Rs.3,000 billion)-plus expenditure in the balance four months of the current fiscal year,” he noted.

“The package also contains provisions for kick-starting an entire array of approved projects through public-private partnership programmes of Rs.100,000 crore in the highways sector,” Mitra said.

On the whole, Ficci believes that the first tranche of the economic revival programme should help in imparting some momentum to the economy to overcome the current slowdown.

Echoing the same view, Associated Chambers of Commerce and Industry (Assocham) president Sajjan Jindal said: “Rs.20,000 crore package (for additional expenditure) would definitely give relief to intended sectors but a package of Rs.70,000 crore anticipated by Indian Inc. would have given a great boost to infrastructure industry especially steel, cement, real estate, electrical and equipment industry including construction.”

Currently, most infrastructural projects and their expansion and modification plans have been put on hold because of liquidity crunch and therefore, the wider and broader package would have given a greater sustenance to boost up the growth momentum, he said.

Jindal, however, added that the package of Rs.20,000 crore or Rs.200 billion in addition to planned expenditure would certainly bring in some relief to stressed sectors such as textiles, small and medium enterprises (SMEs), gems and jewellery and other related industry.

Pawan Goenka, vice-president of Society of Indian Automobile Manufacturers (SIAM), said the auto companies would “definitely pass on all benefits to the consumers”.

However, Goenka, who is also president of auto major Mahindra and Mahindra’s automotive division, said the industry was disappointed over the “lack” of initiatives to enhance credit at the retail level.

“Though the Reserve Bank of India slashed key interest rates yesterday (Saturday), it is still not clear whether this will enhance the flow of credit in the market,” he said.

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