Highlights of second stimulus package

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• Full exemptions on zinc and ferro alloys from basic customs duty withdrawn.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

• Set up a fast track monitoring committee to ensure expeditious approval and implementation of central projects. Chief Ministers advised to do the same.