Finance Minister Nirmala Sitharaman yesterday met Prime Minister Modi for consultations on a booster dose for the economy. During the meeting, it was decided that the Government had to take steps to arrest the decline in fortunes of several sectors. The package could be announced as early as this weekend.
She had last week met representatives from several distressed sectors, including public and private sector banks, MSMEs, NBFCs, automobiles, financial services, FPIs, steel and real estate sector.
Sources said a consensus had been reached on boosting some of the sectors in trouble and steps had been taken to address one the sources: Lack of liquidity with non-banking finance companies that had been lending to the automobile and real estate sectors. Industrialists had suggested injecting liquidity in the system to the tune of Rs 1 lakh crore.
Among the steps being considered are offering GST relief to some segments in the automobile sector and restoring input tax credit for the real estate sector. But both these measures will have to be taken to the GST Council for discussion and it is a moot point how many states would be willing to forego revenue on this account. In the realty sector, there is a consensus between the industry and the Government on increasing the tax for premium real estate but the former also wants restoration of input tax credits to take place in tandem.
