India First Edition

Indian Economy-Stimulus Package-II

Key highlights of 2nd stimulus package  announced by Government of India.

a) RBI cuts key rates: The repo and reverse repo rates were slashed by 100 bps each while the CRR was slashed by 50 bps

b) The ‘all in cost’ ceiling on external commercial borrowing (ECB) would be removed, under the approval route of the RBI

c) The development of integrated township would be permitted as an eligible end use of the ECB, under the approval route of the RBI

d) NBFCs, dealing exclusively with infrastructure financing would be permitted to access ECB from multilateral or bilateral financial institutions, under the approval route of the RBI

e) FII investment limit in rupee denominated corporate bonds in India would be increased from US$ 6 billion to US$15 billion

f) Credit targets of public sector banks are being revised upwards, which will be monitored by the government on a fortnightly basis

g) EXIM bank has obtained line of credit of Rs 5000 crore to provide pre and post shipment credit to Indian exporters

h) Accelerated depreciation of 50% will be provided for commercial vehicles purchased between 01/01/2009 and 31/03/2009

i) Importantly, the government will closely monitor its spending to expedite the pace of expenditure for all schemes and programmes

j) The government has re-imposed countervailing duty (CVD) of 8% and special CVD (special additional duty of customs) of 4% on imported cement, thereby providing a level playing field for domestic suppliers

k) Withdrawal of exemptions from CVD on TMT bars and structurals

l) Withdrawal of full exemption from basic customs duty on zinc and ferro alloys

For details, click on the link below:

http://www.icicidirect.com/mailimages/StimulusPackageII.pdf