New Delhi: The Finance Ministry is holding back-to-back discussions with the Prime Minister's office and the Reserve Bank of India to come out with a sectoral policy package at the earliest but sources rule out any fiscal stimulus having direct revenue implications. There will be relief to the sectors in stress through policy interventions like for the auto sector, the industry's demand for a separate refinance window under the RBI is being discussed.
On the FPI surcharge issue, options still being discussed and no conclusion has been arrived at, as FPIs continue to pull funds from equity market. The demand for GST rate cut for auto sector from 28% to 18% is also currently not under discussion as only 30 items remain in the highest slab of 28% from the original list of as many as 235. According to an estimate, a rate reduction for two-wheelers to 18% from the current 28% will reduce the GST mop-up by about Rs 6,000 crore a year, say sources.
The RBI and the government are also in talks with PSBs to have flexibility in lending to the auto and its ancillary sectors so that the slump could be checked and sales of vehicles boosted.
Both the RBI and the Finance Ministry are likely to ask PSU banks to carve out suitable customised lendings to auto dealers without affecting their NPA situation. Then there is the proposal of the apex NBFC body, the Finance Industry Development Council (FIDC), which has sought from the government that they should be allowed to avail of refinance facility under the Mudra scheme and a permanent refinance window at the RBI be set up - similar to the one that National Housing Bank (NHB) has - so that it can offer them liquidity at need.
There is a need to find an alternative source of funding for them outside the banking channels and a dedicated refinance window can be helpful, the FIDC had told the Finance Ministry recently.