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Price cuts sought to spur demand
New Delhi, Nov 18 : With a view to reviving the economy, the Centre today announced fresh duty changes for select sectors and asked auto, housing and airline companies to cut prices to spur demand.
Finance Minister P Chidambaram, speaking at the India Economic Summit, also assured manufacturers that he would consider excise duty cuts for sectors facing the heat of the global financial meltdown, reciprocating which industry chambers promised to lower prices of manufactured goods to keep the growth going.
Listing out the measures the government has taken to beat the slowdown, the Finance Minister exuded confidence that the economy would record satisfactory growth in the current fiscal and improve further next year.
Chidambaram said the government has slapped five per cent import duty on select steel items to check dumping of the alloy from China and CIS countries. It also imposed 20 per cent customs duty on crude soyabean oil, but the industry described the measures as "not adequate".
In this direction, Prime Minister Manmohan Singh has asked RBI to ensure enough liquidity in the system and the bank is monitoring the situation and would decide on its future course of action on interest rates at an appropriate time, Chidambaram said, briefing about the meeting Prime Minister had yesterday with a high-powered group to monitor the economy.
Although industry bodies looked open to the government's suggestion of lowering prices, auto makers Hero Honda, Bajaj and realty leader DLF said they would not be able to do so considering prohibitive lending practices of banks. |
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