The Manmohan Singh government is readying a New Year booster for the Indian economy in the form of an economic stimulus part-II and is signalling that while major industry concerns are being addressed, the forthcoming financial fillip will not be followed by another for a while. The Indian industries have, on number of instances, urged the government to deliver a “message of hope’’ in this time of doom and gloom, which have been enforced by news of falling revenues, operational losses and lay-offs. Recognising wide-spread investor anxiety and hesitancy, the government (finally :)) is keen to prevent a “negative cycle’’ from gathering momentum — where bad news becomes a self-fulfilling prophesy.

The much-discussed stimulus-II is still WIP may take another week of fine-tuning before it is rolled out. The government seems to be keen on ensuring that key issues are addresses and it is not required to come out with another instalment (read, corrections) soon after. Both consumers and producers (not Bollywood producers :)) are eagerly waiting to see what the government has to offer.

Measures under consideration essentially deal with “credit mechanisms” by making more funds available and encouraging banks to chip in by way of lowering lending rates - some PSUs have already done that! However, sectors like real estate may not get tax breaks but be given swifter access to funds. The government expects this sector to cut back a bit on margins as well. For export-driven sectors, the stimulus could hold more duty relief and it is being felt that with increased competitiveness, exporters might keep their heads above water.

It must be mentioned that, despite internal security concerns and turbulent relations with Pakistan, the PM has remained quite focused on the economy and has been taking due note of projections on the global economy, with assessments indicating that India’s growth trajectory faces stiff hurdles for at least another year.