Highlights of second stimulus package

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New Delhi: Following are the highlights of the additional measures announced by the government on Friday to stimulate the economy.

To further liberalise the ECB policy, the government and the RBI have decided:

• FII investment limit in rupee denominated corporate bonds in India increased from USD 6 bn to USD 15 bn.

• All-in-cost ceilings on such borrowings removed.

• Development of integrated townships permitted as an eligible end-use of ECB.

• NBFCs permitted to access ECBs from multilateral institutions.

The flow of credit to the economy will be further enhanced by the following measures:

• SPV designated to provide liquidity support against investment grade paper to NBFCs fulfilling certain conditions. Scale of liquidity potentially available through this window is Rs 25,000 crores.

• Arrangement made with PSBs to provide line of credit to NBFCs for buying commercial vehicles.

• Credit targets of PSBs revised upward to reflect the needs of the economy in the present difficult situation.

• Hold special monthly meetings of State-Level Bankers Committees to resolve credit issues of MSMEs.

• Department of Financial Services to set up cell to monitor progress.

• For micro enterprises, guarantee cover extended by Credit Guarantee Fund Trust to 85 per cent for credit facility up to Rs 5 lakh.

• States will be allowed to raise in the current financial year additional market borrowings of 0.5 per cent of their GSDP.

• IIFCL being enabled to access in tranches an additional Rs 30,000 crores through tax free bonds.

For exporters:

• Restoration of DEPB rates prevailing prior to November 2008.

• Duty drawback benefits enhanced. Will take effect from September 1, 2008.

• Committee set up under the chairmanship of the Finance Secretary to discuss exporters issues.

• EXIM Bank to provide pre-shipment and post-shipment credit, in rupees or dollars.

• Other measures designed to counter recessionary trends are:

• TMT bars and structurals exempted from CVD

• Cement exempted from CVD and Special CVD

• Full exemptions on zinc and ferro alloys from basic customs duty withdrawn.

• The Centre to work with states governments and encourage them to release land for low- and middle-income housing schemes.

• Assistance to states under the JNNURM for the purchase of buses for their urban transport systems.

• Accelerated depreciation of 50 per cent will be provided for commercial vehicles to be purchased on or after 1.1.2009 up to 31.03.09.