Indian government announces plan to boost the economy crash

New Delhi, December 7, 2008. - In alert the increasingly evident effects of the international crisis on its economy, the Indian government today unveiled a package of measures includes extra investment of 4,000 million dollars in the coming months.
Under the plan, spending will total 60,000 million in the rest of the fiscal year, with emphasis on areas such as export, real estate, infrastructure and textiles, which will take special measures.
Furthermore, the Government announced a cut "immediate" 4 percent, except petroleum products in the value added tax (VAT) to help the corporate sector, according to a statement from the office of Prime Minister Manmohan Singh.
"The government was concerned about the impact of the global financial crisis on the financial crisis on the Indian economy and has taken several measures," the statement presentation of the stimulus package.
The announcement came just a day after the Central Bank of India reduced interest rates two to inject money supply and encourage commercial banks to lend more money to businesses.
The measures have been decided by the prime minister himself, and renowned economist Manmohan Singh, in consultation with key economic performance, said an official source at the Indian agency IANS.
The coalition government will ask Parliament for permission to spend an additional $ 4,000 million in the amount foreseen for the next four months, which will mean an expenditure of 60,000 million dollars.
"The economy will continue to need stimulus in 2009-2010 and this can ensure a substantial increase in spending planned for next year's budget," the statement said.
Measures to boost exports include an allowance of 2 percent in employment-intensive sectors like textiles, handicrafts, and aid packages with various incentive programs, export credits and tax rebates.
In the section of the property, the government has asked public sector banks to offer incentives of credit for house purchase, with the possibility of adopting additional measures.
"Housing is a very important potential source of employment and demand for key sectors, and there is great need for properties especially for the groups of low and middle income," the statement said.
Small and medium businesses can borrow up to $ 200,000-twice so far in the Plan-government credit guarantee to meet your financial needs.
In terms of infrastructure, the government has authorized the government company in the industry (IIFCL) to issue bonds worth 2,000 million dollars to support the financing of public projects in the sector.
"The funds will be used by IIFCL to refinance long-term bank loans for infrastructure projects, especially in roads and port facilities," the statement said.
The Government's plan also seeks to help the auto industry by allowing government departments can replace their vehicles, yes, respecting the budget, but with a greater relaxation on time.
"The Government, the statement said, watching the economic situation and not hesitate to take additional measures to control the recessionary trends and maintain the path of economic activity."
India has grown in recent years over 9 percent, although the global economic crisis has dented their expectations for the current fiscal year, to the extent that the authorities have set expectations of around 7 percent.
"The path of the Indian economy is uncertain", said Saturday the central bank governor, G. Subbarao, who warned that the economy will suffer a "painful adjustment".
The economic slowdown will be one of the tests exceed the public against the current government, led by the Congress Party, which is already facing the death throes of the legislature and call elections in the coming year.