Stimulus package: Muted response from India Inc

India Inc’s expectations from the second stimulus package announced by the government are muted.

“The package addresses a wide range and should hopefully give boost to the slowing economy,” said Amit Mitra, Secretary General, FICCI.

The chamber expected the government to review the impact of these measures and fine tune policies on a continuous basis. “We further hope that these measures would be followed by a series of measures as we go along and as the situation demands”, he added.

The PHD Chamber said the package though welcome, was not bold enough to spur demand in the economy and rejuvenate business activity by creating an environment conducive to growth.

“The government could have done much more to boost sagging growth and restore business confidence. The allocation of Rs 30,000 crore for infrastructure is insufficient given the urgency to ensure that money flows into sectors such as roads, airports, power plants and ports which would boost demand and have a multiplier effect on the economy,” said Satish Bagrodia, president, PHD Chamber.

The real estate sector, while hoping to gain from the measures felt that a few key elements that could have revived demand, were not touched upon by the second stimulus package.

“The government could have taken more steps like increasing IT exemption limit for home loan borrowers, make bank loans above 20 lakhs upto 50 lakhs at lower interest rates, and increase the age limit for eligibility of home loans. Each step matters as the government’s intention is to fight the slowdown,” said Rajeev Talwar DLF Group executive director.

The steel sector, which has been among the industries hit by a slide in the commodity prices felt that the package was too late to revive demand in the economy.

“The unprecedented fall of the economy and its resultant credit squeeze have forced companies to halt their expansions plans. In the current situation, any stimulus package is insufficient because the investors have lost confidence,” said Vinod Mittal, Vice Chairman & MD, Ispat Industries.

However, key sectors including the real estate are expected to get a boost from the provisions of the package.