Indian Govt unveils stimulus package to revive economy

New Delhi, Dec 07: Responding to the economic slowdown affecting the country, the govt on Sunday unveiled a wide ranging stimulus package aimed at bringing down prices and providing relief to sectors hardest hit by the global financial crisis.

The Government effected an across-the-board 4% cut in CENVAT that will bring down prices of cars, cement, textiles and other goods as part of an economic stimulus package that also earmarks an additional Rs 20,000 crore for infrastructure, industry and export sectors.

In a virtual mini-budget that entails a revenue loss of Rs 8,700 crore in the next four months, the package seeks to revive the crucial housing, export, automobile, textiles and small and medium enterprises sector to counter the economic slow down caused by the global financial crisis and the recession in the West.

The Central Value Added Tax (CENVAT) on non-petroleum products would come down to 10, 8 and 4% for different categories.

The package also contained full exemption from basic customs duty on industrial intermediate naphtha to give relief to power sector and withdrawal of export duty on iron ore fines while cutting down the levy on export of iron lumps from 15% to 5%.

The much-awaited package, set rolling by Prime Minister Manmohan Singh who is also the Finance Minister, targets power, exports, housing, auto, small and medium industries and infrastructure sectors through additional funding and guarantees that total an amount of over Rs 30,000 crore.