Seeking to reverse the recessionary trend, the government today gave the economy a second stimulus by enabling the industry to borrow more from abroad and FIIs to invest more in the country, besides stepping up public spending.
The package, the last for the current financial year and announced in tandem with rate cuts by RBI, aims at providing much higher and cheaper funds in the economy along with additional expenditure by the Centre and the State to push demand in the country.
While allowing states to access market for borrowing about Rs 30,000 crore to meet additional expenditure, the package provides for liberalisation of External Commercial Borrowing norms and raising FII investment limit in rupee-denominated instruments to $15 billion from $6 billion now.
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Focusing on countering the recessionary trends, the package also withdrew exemptions on countervailing duties on cement, TMT bars and structurals that were originally given to contain inflation.
Announcing the package, Deputy Chairman of Planning Commission Montek Singh Ahluwalia said special attention was being paid to housing sector, macro and micro industries and infrastructure sectors through a series of measures, including provision for higher credit and greater liquidity for the non-banking financial companies.
