By IANS,
Mumbai : Following are the highlights of a growth stimulus package unveiled by Reserve Bank of India (RBI) Governor D. Subbarao here Saturday in a bid to cushion the impact of global slowdown on the country’s economy:
– Repo rate cut by 100 basis points to 6.5 percent
– Reverse repo rate cut by 100 basis points to 5 percent
– No changes in cash reserve ratio and statutory liquidity ratio
– Refinance of Rs.7,000 crore (Rs.70 billion/$1.4 billion) for Small Industries Development Bank of India
– Refinance of Rs.4,000 crore (Rs.40 billion/$800 million) for National Housing Bank
– Housing loans under Rs.2 million classified under priority sector
– Exceptional treatment to commercial real estate exposures
– Restructuring by banks eligible for exceptional regulatory treatment
– Measures should step up demand and arrest the growth moderation
– Net liquidity since September enhanced by Rs.300,000 crore (Rs.3,000 billion/$60 billion)
– Difficult to precisely anticipate every development of global crisis
– Recession will be deeper, recovery longer than earlier anticipated
– Period of painful adjustment for Indian economy inevitable
– Fundamentals of Indian economy continue to be strong
– Economists predicting the worst global recession since the 1970s
– Confidence in global credit markets continues to be low
– Credit lines remain clogged
– India’s exports declined in October for first time in seven years
– Demand for bank credit slackening, despite comfortable liquidity
– But inflation, based on wholesale prices, declining