(MENAFN- KNN India) Emphasising that real estate, power, steel, gems and jewellery sectors are in real crisis, industry body ASSOCHAM has sought special dispensations for these industries by way of cut in excise duty along with other accommodative measures like teaser loans for the housing sectors for taking these industries out of stress.
It said that Reserve Bank of India , banks, states and the Central Government should move fast in taking the troubled power distribution companies (discoms) out of morass, or else they would become dead assets and big drags on the exchequer, causing big rise in the non-performing assets.
"The RBI did show a great courage and slashed the policy interest rates, which however, did not get transmitted to the borrowers, on earlier occasions," said the chamber.
Between September 2014 and August , 2015 while the Repo rate got reduced by 75 basis points (before the latest 50 bps cut), the banks weighted average lending rate was marginally brought down to 11.93 per cent , just down 15 bps from 12.12 per cent.
Certainly, the banks did not help the situation and some of these core employment generating industries slipped further into troubles because of lack of consumer demand, high interest costs and cheap imports, it said.
"For creating additional demand, the government will have to chip in with, rather bold measures and create extra elbow room for the select industries by way of extending short tenure stimulus on construction material like steel, cement, power equipment while for the gems and jewellery, export sops like interest subvention must seriously be considered," said ASSOCHAM Secretary General, DS Rawat.
He said it would be wrong to assume that the special dispensation would create a hole in the government's fiscal purse.
On the contrary, extra demand would mean more tax collection and increased revenue while creating an overall positive atmosphere, added Rawat.
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