The Union government is planning to stimulate the country's economy through capital infusion into government-owned banks. Prior to this act, the Union Finance Minister P Chidambaram will hold a meeting with RBI, bank chairmen and top officials of his ministry soon after his return from the US on October 17. Currently Chidambaram is on his tour in the US.
The proposed Finance Minister's meeting with bureaucrats will decide on the quantum of additional bank recapitalisation to enable banks to provide banks to provide loans for purchase of cars, two-wheelers and consumer durables at lower interest rates during the festival season to stimulate the economy, projected by IMF to grow at a rate of 3.7 per cent.
After October 17, once he returns to India, the meeting is expected anytime. The meeting is to assumes significance as factory output in the country dropped to a virtual zero per cent growth at 0.6 per cent in August. The worst part is the manufacturing growth was virtually flat at 0.1 per cent. Even the industrial production during the first five months of this financial year (April-August) was flat at 0.1 per cent.