India Economic Stimulus Package

09 Dec

The recently announced India’s economic stimulus package is in the right direction. Primarily aimed at tax reductions in real estate and automobile sectors, this package helps these two ailing industries. But the question is, did it come at the right time? Also, is it good enough to stimulate a bounce back?

The biggest challenge is to make sure that

  • The sops reach the end customers fast enough, so that the cash savings are fed back to the economy. The automobile industry reacted quickly, but the real estate industry’s response is going to be tricky, given the multi-phase purchase model we have in the industry.
  • The sops are not going to hurt the tax collections badly and hence don’t impact the infrastructure improvements planned by the government.

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