An expected reduction in interest rates on housing loans, lowering of excise duty on automobiles and a new package for exporters have only helped delay decisions both by consumers and businesses.

While property buyers are waiting for a reduction in both property prices and home loan rates, builders and automobile manufacturers are waiting for demand to pick up after the government announces its relief package.

Most automobile firms have either cut down production or have announced partial closures in a bid to cut down inventories.

Property developers who have bought land are now waiting for unsold stock to get over before launching new projects. They need a real boost to demand for starting construction again.

Though there has been a drastic fall in demand for property, prices have not fallen to that extent and there is still a demand for land.

A cut in the retail prices of fuel may help the government rein in inflation rate further, but won't curb property prices that have already peaked. A cut in interest rate won't help either. Property rates have to fall drastically if demand is to pick up further, or the new economy booster should be able to create enough demand for urban property if the real estate sector is to kick back again.

The government is expected to announce a reduction in the prices of petrol, diesel and LPG with a steady fall in the prices of crude oil, which now stand at around $45 a barrel. But along with it, the government would also reimpose a customs duty on crude, which it abolished after oil prices hit $147 a barrel in July.

The government was then forced to hike prices of petrol and diesel by Rs5 and Rs3 per litre and that of LPG by Rs50 a cylinder. It may now slash petrol price by Rs 5 a litre, diesel by Rs 2 per litre and domestic LPG by Rs 20 per cylinder in line with fall in global oil prices.

State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum are now selling petrol at a profit of Rs14.89 a litre and diesel at a margin of Rs3.03 per litre. But they continue to lose Rs17.26 on sale of every litre of kerosene through public distribution system (PDS) and Rs148.32 per 14.2-kg domestic LPG cylinder.

While much of the recent inflation is attributed to the skyrocketing of oil prices, a reduction in oil prices has not helped to bring down inflation to that extent. Inflation, however, has now cooled to single digit levels at 8.40 per cent for the week ended 22 November.

Meanwhile, speaking on the sidelines of an Indo-Russian CEOs forum in New Delhi, commerce minister Kamal Nath siad the stimulus package for the economy to be announced on Saturday by the government and Reserve Bank will not be a one-off assistance, but would be the first in a series of measures to help sectors hit by the global slowdown.

RBI is expected to signal a  rate reduction by banks for the more sensitive automobile, real estate and infrastructure sectors with a cut in its short-term lending rate.

The government is expected to announce a Rs15,000 budgetary support to infrastructure projects and interest rate subsidies worth over Rs2,000 crore to the recession-hit exporters.

The package would also include reduction in excise duty on commercial vehicles hit hard by the recent demand slump.