Days after Prime Minister Manmohan Singh took additional charge of the finance ministry and called for the need to revive the economy by reversing the climate of pessimism, the government took a series of feel good policy decisions.
The Union Cabinet and Cabinet Committee on Economic Affairs (CCEA),in their meetings on Tuesday,took decisions that it hopes will push investment in housing,boost manufacturing and also spur agriculture. So,at a time when the Reserve Bank of India continues with its aggressive monetary stance,the government has provided a reprieve to small home loan borrowers by extending the 1 per cent interest subsidy on home loans for another year.
The subvention will be available to those taking loans of up to Rs 15 lakh in the current fiscal where the cost of house is not more than Rs 25 lakh,the Cabinet decided.
When interest rates have risen,even 1 per cent relief is a relief for the middle class and lower middle class, home minister P Chidambaram said. The limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 lakh and Rs 9,925 for a loan of Rs 10 lakh,he added. The decision will cost the exchequer Rs 400 crore in the current fiscal.
The CCEA has also approved the setting up of the countrys fifth Petroleum Chemicals and Petrochemicals Investment Region (PCPIR) in Tamil Nadu,hoping to attract investments of Rs 92,160 crore. The PCPIR would come up in the Cuddalore and Nagapattinam districts of the southern state on over 256.83 sq km,Chidambaram said. The Tamil Nadu plan is the fifth such in the series. While Nandigram was the earliest PCPIR announced by the government in 2008,the latest one at Vizag-Kakinada region in Andhra Pradesh too has got caught on the issue of land acquisition.
In a fresh attempt to spur Indian manufacturing of electronic products,the government has also decided to provide financial support of up to Rs 50 crore each for setting-up a cluster that manufactures specific kinds of devices. The Cabinet approved the Electronics Manufacturing Clusters scheme that would provide financial assistance to Special Purpose Vehicle for setting up such clusters.
Meanwhile,the government chose to refer the department of telecoms (DoT) proposal to levy a one time fee for spectrum held by existing operators to a ministerial panel. There was one proposal from DoT that has been referred to EGoM, Chidambaram said.
He also expressed confidence that the government will soon appoint another minister to head the panel,after agriculture minister Sharad Pawar opted out of the job.
In a related development,state-owned TCIL has got governments approval to buy out its partners 60 per cent stake in TCIL Saudi Co (TSCL) for Rs 2.8 crore. The CCEA has approved the DoTs proposal on acquisition of 60 per cent shares of TSCL from NESMA Group to make it a 100 per cent subsidiary company of TCIL, Chidamabaram said.
The CCEA also approved a proposal for reimbursing the freight on distribution of de-controlled phosphatic and potassic fertilisers. These fertilisers have come under Nutrient Based Subsidy policy as of April 1,2010.
* Interest subvention scheme for small home loans to be extended by a year
* To boost local manufacturing of electronic products,the government has also decided to provide financial support of up to R50 crore for setting-up a cluster that manufactures specific kinds of devices
* CCEA has also approved the setting up of the countrys fifth Petroleum Chemicals and Petrochemicals Investment Region (PCPIR) in the Cuddalore and Nagapattinam districts of Tamil Nadu