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Govt announces steps to arrest economic slowdown

  • Giving a push to economy hit by slowdown, the government unveiled a slew of policy measures including relaxation of spectrum rules for the telecom companies, assuring coal linkages to power sector and according environmental clearances to a mega hydel project.
  • A flurry of activities in the economic ministries, apparently at the instance of the Prime Minister's Office (PMO), is aimed at sending a strong signal that the government wants to tackle the slowdown by fast-tracking decision making, sources said.
  • The economic growth rate during the current fiscal is expected to slowdown to 6.9 percent from 8.4 percent a year ago. 
  • At the instance of the PMO, Coal India will sign by March end agreements for supply of fuel to power projects commissioned up to December 2011.    
  • The decision addresses long-standing tussle between the state-controlled coal sector and private power producers and follows constitution of a Committee of Secretaries (CoS) constituted by the Prime Minister to look into issues. 
  • Giving a major advantage to old GSM operators, the government said all telecom service providers would be allowed to hold higher spectrum of up to 10 MHz. Current prescribed limit is 6.2 MHz of GSM spectrum.
  • In another important decision, Environment Minister Jayanthi Natarajan has given the green signal for construction of a 1,750 MW Demwe Lower Hydro Electric hydel project in Arunachal Pradesh on Lohit river, overrulling ecological concerns.
  • In order to give a boost to the National Manufacturing Policy, the government announced that units in the proposed mega industrial enclaves will be given highest priority for environmental clearances.    
  • Besides, the procedures for green approvals have been relaxed, exempting the individual units within proposed National Manufacturing and Investment Zones (NMIZs) from public hearings, once they have been held for the entire zone, provided they are notified by the concerned state government.    
  • Meanwhile, the Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee decided to offload 5 percent equity in the energy major ONGC through the auction route.
  • The decision would help the government in mopping up Rs 12,000 crore from disinvestment within the current financial year. With less than one-and-half months to go for the current fiscal, the government managed to raise only Rs 1,145-crore from stake sale in Power Finance Corporation (PFC).

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