Stimulus package to revive sagging economy on cards

Sanjeev Sharma

Tribune News Service

New Delhi, September 21

The government is likely to announce a stimulus package for reviving growth amid a sputtering economy which will include measures to boost private sector investments. Finance Minister Arun Jaitley today said there is problem of private investment and the government is seized of the issue. “Very soon you will hear from us”, Jaitley said speaking at the investor summit organised by JP Morgan.

He said from day one, this is a proactive government. “We are analysing the economic indicators and appropriate action will be taken at right time”, he said. The Finance Minister has held meetings with the Railways and Commerce Ministers and other government officials on the economic situation amid calls for a stimulus to boost growth which has been going down for past few quarters.

Signalling that real estate may be brought under GST, the Finance Minister said “As far as bringing more items under GST is concerned, I think real estate is most easy to bring in”.

As far as farm loan waiver by states is concerned, the Finance Minister said they have to find their own resources for this purpose.

There are growing calls for a stimulus package for the disruption-hit economy with several measures being floated, including the government spending more and expanding the fiscal deficit.

Meanwhile, the government today announced a new Public Private Partnership (PPP) Policy to promote private investments in affordable housing.

The new policy for affordable housing allows extending a Central assistance of up to Rs 2.50 lakh per each house to be built by private builders even on private lands.

Minister of Housing and Urban Affairs Hardeep Singh Puri announced the policy at an event organised by industry body NAREDCO in Mumbai. Puri said the policy seeks to assign risks among the government, developers and financial institutions, besides leveraging under-utilised and unutilised private and public lands towards meeting the Housing for All target by 2022.

He exhorted private developers to seize the investment opportunities in affordable housing in the prevailing enabling environment.

The two PPP models for private investments in affordable housing on private lands include extending central assistance of about Rs 2.50 lakh per each house as interest subsidy on bank loans as upfront payment under the credit linked subsidy component of Pradhan Mantri Awas Yojana (Urban). Under the second option, a Central assistance of Rs 1.50 lakh per each house to be built on private lands would be provided, in case the beneficiaries do not intend to take bank loans.