India Govt. announces measures to boost economic growth

The government also said it was preparing to recapitalize state-run banks to the tune of Rs.20,000 crore ($4.1 billion).

This would take place over the next two years to ensure the banking system does not suffer from capital adequacy constraints, it said.

The government has also allowed different states to raise in the current financial year, additional market borrowings of 0.5 percent of their Gross State Domestic Product, totaling about Rs.30,000 crore to meet additional expenditure and fund infrastructure projects.

It also announced several measures to support recession-hit exporters including restoration of duty-entitlement passbook (DEPB) rates to those prevailing prior to November 2008 to account for the loss due to currency value changes and enhancement of duty drawback benefits on certain items with retrospective effect from September 1, 2008.

EXIM Bank, which has obtained from RBI a line of credit of Rs.5000 crore, will also provide pre-shipment and post-shipment credit, in rupees or dollars, to Indian exporters at competitive rates, the government said.

To boost steel and cement sectors, the government has brought back countervailing duty on TMT bars and structural cement. These duties were exempted to contain inflation.