India rules out stimulus packages for ailing industry

India has no plans to provide any special stimulus for business despite the continuing downturn in industrial activity, a senior official in the finance ministry said today.

"I have not heard of any such plan," economic affairs secretary Arvind Mayaram said when asked about the issue on the sidelines of a function in New Delhi. He thereby ended recent speculation that the finance ministry and the Reserve Bank of India were together working out a special stimulus package for certain key sectors of the economy.

India's growth rate slipped to a decade's low of 5 per cent during 2012-13; and in the first quarter of the current fiscal it slipped further to 4.4 per cent.

Virtually all international credit rating agencies have warned that Indian securities could be downgraded to junk status if the government fails to take prompt action.

Mayaram further said the government, faced with ever-mounting expenses amid an unprecedented economic slowdown, hopes to save about Rs10,000 crore through the recently announced austerity measures for government functionaries.

Among the measures announced last week, the government has barred holding meetings at five-star hotels and the creation of new posts in federal departments.

Mayaram said revenue collection so far has been in line with expectations, but in case of a shortfall, expenditure of a "non-essential nature" would be cut.