Indian Government Plans of Stimulus After Drop in GDP Q2

The government is looking for ways to boost the economy and giving attention to certain sectors. Finance minister Arun Jaitley gave hints that there will be action taken after a talk with Prime minister Narendra Modi. Although, there are no specifics given saying all economic indicators are being considered.  

The GDP growth rate dropped to a three-year low of 5.7 percent for three months up to June. This implies the slow growth of economy because lackluster private investments which also affected the availability of jobs.

According to the Indiatimes, the initial support will be given to the banks public sector which faces the NPA crisis. The government will give out 25,000 cr rupees in Public Sector Undertaking (PSU) banks in the next fiscal year of 2018 which is more than the budget of 10,000 cr rupees. This action is a stimulus to credit offtake for the Indian economy.

Secondly, the government also needed to promote exports. There has been a slow rate in foreign demand amid the strong rupee which makes the situation more problematic. Hence, the government is trying to find ways to adjust refund policies under Goods and Services Tax (GST) a more dynamic forex management with 65,000 cr rupees refund supply for the third quarter of the year.

Jaitley has almost completely cut in taxes on petrol and diesel and asserted the need of funds to support the spending requirements. Moreover, the assessment denotes the transient surge in prices.