labels: Trade
Second economic stimulus package likely next week: Kamal Nath news
11 December 2008

The government is planning a second stimulus package for major sectors of the economy which were not covered in the earlier stimulus plan, commerce and industry minister Kamal Nath said.

Kamal Nath, commerce and industry minister He said the fresh stimulus plan, which is expected to cover primarily sectors such as engineering, textile and agriculture, will most likely be announced in the next week.

These sectors, which are also hard hit by the global economic downturn, did not find mention in the first phase of economic stimulus.

"We have to ensure that our domestic demand continues and government will be taking all steps,'' Kamal Nath said, adding, ''We are again looking at something for next week."

The minister was addressing a meeting of the India-Spain Investment and Business Cooperation Forum, organised by the Spanish Institute of Foreign Trade and the Federation of Indian Chambers of Commerce and Industry (FICCI).

He said the second stimulus package would be aimed at generating employment and ensuring that the credit needs of the companies are met.

In the next package, the minister said, "We will look at engineering sector, greater re-finance facility for exporters and textile and agriculture sectors."

As part of an estimated about Rs 35,000-crore stimulus package, the government last Sunday reduced four per cent excise duty across the board and announced plans to raise public expenditure by additional Rs20,000 crore during 2008-09.

The second stimulus package assumes significance in the background of  the World Bank projection of a deeper and prolonged slowdown, which may pull down the global economic growth to less than one per cent in 2009.

He said India will open up huge investment potential in the next few years as the country modernises highways; railways; power sector; telecommunication and urban infrastructure.

He said major sectors that attracted FDI included ceramics, telecommunications, metallurgical industries, cement and gypsum products, construction activities, computer software and hardware, automobile industry etc.

''It is our endeavour to continue to provide a stable and conducive investment climate, both for the domestic investor and the foreign investor, and to manage the economy in a manner that facilitates inclusive growth driven by enhanced investment and consumption,'' he said.

''Our policy of encouraging both the public sector and the private sector and fostering competition has stood us well. It is only an open economy that will bring gains in efficiency and productivity, reward innovation and enterprise, and ensure inclusive growth,'' he added.

Many developed countries are in recession and several more are expected to slip into a recession shortly, Nath said. ''I wish to emphasise that India is nowhere near a recession. The growth estimate for the first quarter of 2008-09 was 7.9 per cent and the second quarter saw 7.6 per cent growth – construction, trade, hotels, transport and communication leading the pack at double digit growth rates'', he added.

Kamal Nath said India believes in strengthening the multilateral trade rules of the WTO and has reiterated the need for a serious discussion on the expectations of WTO members regarding other issues. He said it is important that the Doha Round negotiations are brought to a successful conclusion, and added that such a conclusion can only be possible if we are faithful to the mandate and the outcome reflects a clear balance between market opening and the development needs of the majority of the membership.
 
The meeting was attended by Miguel Sebastian, minister of industry, tourism and trade of Spain; commerce secretary G K Pillai and business representatives from the two countries.


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Second economic stimulus package likely next week: Kamal Nath