The Indian economy which maintained a healthy clip of 9 per cent-plus growth rate on an average over the last four year suddenly seems to have lost steam. Hit by the global meltdown, the GDP growth rate slipped to 7.9 per cent and 7.6 per cent in the first two quarters of the current fiscal. Sectors such as automobiles, banking and NBFCs, real estate and housing and exports that did remarkably well in the last four years, are struggling for credit and consumers.

The apex committee chaired by Prime Minister Manmohan Singh that met on Tuesday approved the broad contours of the multi-sector stimulus package and directed the Committee of Secretaries led by Cabinet Secretary KM Chandrasekhar to finalise the blueprint of the package today. With Assembly elections concluding on Friday, it was decided to announce the package on Saturday.

The signs of a slowing economy are gathering fast. an official said, a commerce department survey of 121 export companies says they lost 65,000 jobs in just three months, from August to October 2008. They also suffered a loss of export orders worth Rs 1,792 crore. “Exports that stood at $163 billion are expected to be between $155 billion (worst case scenario) and $175 billion (best case scenario) this fiscal,” he said. The CoS has agreed to refund of service tax, DEPB benefits and other sops totaling about Rs 2,000 crore, he added.

The objective, according to officials, was to help corporate India tide over the current credit crisis with even the best of AAA-rated companies unable to get bank loans, even at 13 per cent. “The prevailing situation, if allowed to continue, will kill the growth story so assiduously built over the last four years,” an official said. Accordingly, the sectors that create most jobs and have a huge spillover impact such as real estate, automobiles and NBFCs, will get due attention.

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