According to a senior policy adviser, India's slowing economy still has room for additional fiscal and monetary policy measures to spur growth in the the present downturn.
The government has over the past few months already introduced a slew of measures including interest rate cuts, cuts in factory gate dutes, increased spending in the face of high borrowing costs and the global downturn.
Policy makers are optimistic about the Indian economy's capacity to sustain growth despite the market conditions and project a 7-per cent growth even amidst fears of a difficult 2008-09 fiscal.
However, the growth rate will be lower than the 9 per cent growth rate registered over the last three years.
Though the Indian industry has generally welcomed the government's initiatives, it wants the government to do more and is lobbying for further cuts in rates and taxes.
Exporters are especially badly hit with the steep drop in overseas sales.
Exporters are hoping for relief from the high-level government meeting scheduled for Wednesday, but Planing Commission deputy chairman Montek Singh Ahluwalia has already ruled out any tax incentives in the immediate future.
Exporters are expected to push for tax holiday on export income, increase in tax refunds through drawback and additional concession on interest rates in the meeting with Alhuwalia and commerce and industry minister Kamal Nath slated for tomorrow.
Cabinet secretary K M Chandrasekhar, and secretaries of finance and commerce ministries would attend the meeting. The meeting is being convened at the instance of the Prime Minister Manmohan Singh who also holds the finance portfolio.
Most exporters would need government help as they do not have orders beyond February. If no goverment help is forthcoming it may not be possible to even reach the $170-billion mark, against the target of $200 billion for exports according to A Sakthivel, president, Federation of Indian Exports Organisations.
Meanwhile trade and commerce Minister, Kamal Nath, has hinted that the government would consider a relief package for exporters on top of the relief measures for exporters that form part of the stimulus packages granted since December.
India's export growth slowed sharply in October and November 2008, as demand from key markets like the US and the EU dried up in the backdrop the the slowdown.