Government Mulls Another Booster Shot For Ailing Economy
The finance ministry is working on one more booster dose to give a leg-up to the economy that has hit over six-year low of 5 percent, a senior finance ministry official said.
The blueprint for the stimulus is ready and would be announced by Finance Minister Nirmala Sitharaman in the next few days, the official said without giving further details.
Earlier this week, Reserve Bank of India Governor Shaktikanta Das had said the government has taken a number of measures to boost the economy in three phases and indicated that more steps are likely.
“I think with right measures taken, things should improve. It's a positive trend that the government is responding fast and I don't think we have heard the last from the government with regard to dealing with the current economic situation. My expectation is that it will be a continuous process and they would definitely be dealing with other challenges,” Das had said.
The first set of announcements was made on Aug. 23 that included rollback of the enhanced surcharge imposed on foreign portfolio and domestic investors in Budget 2019-20. Sitharaman had in her maiden Budget raised the surcharge on income tax paid by super-rich individuals.
It was followed by announcement with regard to consolidation of 10 public sector banks into four on Aug. 30. According to the consolidation exercise, United Bank of India and Oriental Bank of Commerce are to be merged with Punjab National Bank, making the proposed entity the second-largest state-run bank.
Syndicate Bank is to be merged with Canara Bank. Allahabad Bank will be merged with Indian Bank. Andhra Bank will be amalgamated with Corporation Bank and Union Bank of India.
This would be the second round of consolidation of PSU banks. Earlier this year, State Bank of India had absorbed its five associate banks and the Bharatiya Mahila Bank to form the biggest public sector lender. In another merger, Bank of Baroda had taken over Dena Bank and Vijaya Bank.
Last week, the government announced a slew of measures to boost exports and the real estate sector.
During the week, the finance minister will chair the 37th meeting of the Goods and Services Tax Council, which is expected to discuss rate revisions for various sectors, including automobiles, fast-moving consumer goods, and hotels.
Besides, she will meet heads of the PSU banks to discuss issues, including following up on transmission of monetary policy rates.