More stimulus, import curbs in the offing

The country may witness more import curbs, particularly on foreign textiles and yarn that have been invading the country’s markets through Bangladesh route. There could also be a GST cut on synthetic and man-made fiber and yarn. Slowing growth in the manufacturing and services sectors on the back of an overall economic slump has prompted the government to fire on all cylinders.

A section in the Commerce Ministry headed by Minister Piyush Goyal is preparing for a Board of Trade meeting next week, only the second since it was set up in the first term of the Prime Minister Narendra Modi government. It will deliberate upon export promoting measures and cut down on the country’s imports so that local manufacturers do not lose business and jobs.

Separately Finance Minister Nirmala Sitharaman has sought suggestions from the airport, energy, rail, and road sector representatives on how private investment in infrastructure sector can be jacked up to spur economic growth and employment. The finance minister has been meeting sectoral experts from real estate, automobile, small and medium industries among others to get the first-hand information on their woes.

It is on the basis of these meetings that the government would decide on some immediate fiscal policy response to lift the economy in the short term, sources said. On August 23, Sitharaman had announced a slew of measures to help the automobile sector shed their 10-month long sales slowdown.

PMI dips

After manufacturing, the country’s service sector activity has slowed down in August. The Composite Purchasing Managers’ Index —which maps both the manufacturing and services industries—expanded 52.6 in August, lower than its July print of 53.8. A staffing firm Teamlease Services said economic slowdown has resulted in a reduction in the hiring of talents in sectors like telecom and automobiles. It said while banking, insurance, e-commerce sectors continue to grow, telecom, automobile, real estate, and construction have been subdued.

On the revenue generation side, the PMO has been holding meetings with the finance ministry representatives on ways to shore up disinvestment proceeds at a time when market conditions are not favorable. Sources said the focus will be more on strategic disinvestment and asset monetisation to reach the target of Rs 1.05 lakh crore in fiscal 2019-2020.