By KUNA,
New Delhi : In a serious bid to enable the Indian economy come out of recession, a fallout of the global meltdown, the Indian Government has announced an additional stimulus package of Rs 20,000 crore (4 Billion Dollar), over and above the Rs 15,000 crore (3 Billion Dollar) planned package for the last quarter of fiscal 2008-09.
The Government has also announced a cut of four percent in CEVAT, central excise value added tax, a tax imposed by the Centre at different stages of the manufacturing process.
The step is going to result in reduction of prices of commodities like cars, cement, steel, and consumer durables like washing machines, air-conditioners, etc. It would also increase the purchasing power of consumers and also the overall living standard. Only two days ago, the Government had also announced a cut of Rs 5 and Rs 2 on petrol and diesel prices, respectively.
Major car manufacturers in the country have already started announcing major cuts in vehicle prices, as a result of the stimulus package.
Announcing the package, Deputy Chairman of Indias Planning Commission Montek Singh Ahluwalia said that the steps taken would compel manufactures to bring down prices and pass on the tax benefits to consumers. He stressed that the Government was keeping a “close watch” on the evolving economic situation and would not hesitate to take additional steps that may be needed to counter recessionary trends.
An official statement issued by the Planning Commission said: “The government has been concerned about the impact of the global financial crisis on the Indian economy and a number of steps have been taken to deal with this problem. Such steps will continue in the next fiscal year too.” As a fallout of the global recession, the Indian economy has also been going through a dire phase, with its share markets plummeting to below 8000-points level from as high as 23,000 points till a few months ago.
The steep crash in share market (Bombay Stock Exchange) had rendered huge losses (running in crores of rupees) to individuals, some of whom were even forced to end their lives.
The impact has also been felt on the job market. A large number of Indian and multi-national companies (MNCs) have announced salary cuts and even retrenchments.
In one case, a CEO of an Italy-based auto-component manufacturer “Cerlikon-Graziano” was lynched by a mod of enraged workers a couple of months back on the outerskirts of New Delhi, after a “squeezed reimbursement and retrenchment policy” with regard to temporary workers.
Thereafter, in October the Jet Airways, one of the major private airlines in India, announced a layoff of 1900 employees, but subsequently withdrew the decision bowing to “political pressure” from government.
Besides, major software firms, including some US-based, have also been announcing salary and job cuts in the recent months.