Stimulus Package by Karnataka Government

In a clear attempt to provide the much needed stimulus to the state economy affected by the general slowdown, the Karnataka government today unveiled a host of measures to prop up the construction industry, besides encouraging private investment, farm production and infrastructure projects through public private participation.

Civil aviation minister, Mr Praful Patel, today ruled out any bailout package at the present juncture to domestic private air carriers but felt FDI could be one of the options to meet funding requirements. “I don't think that at this stage any direct financial concessions or assistance is possible (to domestic private air carriers)...FDI could be one of the options,” Mr Patel said at a function here.

The Reserve Bank of India officers and employees have been on mass casual leave today which paralysed operations in the money market. The programme was observed by staff and officers in all RBI offices, the United Forum of Reserve Bank Officers and Employees said in a statement here today.

Deal reached on $827bn US stimulus package

US President Barack Obama on Saturday called on senators to complete passage of the $827bn stimulus package that was struck behind close doors late on Friday. US Senate Democrats agreed to cut their hopes for a larger economic stimulus package and support a compromise that would give Mr Obama an important but narrow victory.

Mr Obama said he was pleased that the bipartisan compromise, which may only result in the switched votes of three Republican senators, out of a total of 41, ended a turbulent week on a ”positive note”.

But he urged the upper chamber to accelerate its vote. It now seems likely that Congress will be unable to finalise a bill before the White House’s deadline of February 13. “Americans across the country are struggling and they’re watching to see if we’re equal to the task before us,” said the US president. “Let’s do whatever it takes to keep the promise of America alive in our time.”
Democrats said a vote on passage of the measure – drafted by leaders of a group of moderate lawmakers from both parties – and closely watched overseas as a sign of US commitment to help revive the world economy, would be held on Tuesday.

U.S. Economy Preview : - Retail Sales Probably Slumped in January

Sales at U.S. retailers probably fell in January for a seventh straight month as surging unemployment hobbled consumers, economists said a report this week will show.

Purchases fell 0.8 percent, capping the longest slide since comparable records began in 1992, according to the median estimate in a Bloomberg News survey. Other reports may show falling oil prices helped narrow the trade gap and prevented consumer confidence from sinking further.

Household spending is likely to keep shrinking as job losses mount, home prices skid and banks limit lending. President Barack Obama is seeking to push a $900 billion stimulus package through Congress this month to jump-start the economy over objections by some lawmakers that the plan is too focused on spending and will bloat the government deficit.

Stimulus Battle May Signal Tough Sell for Bank Rescue

President Barack Obama’s struggle to push an economic stimulus bill through Congress may seem easy compared to what he’ll encounter when he returns to Capitol Hill for additional funds to rescue the banking system.

Obama will likely need to ask Congress for more money to recapitalize banks, as much as $1 trillion on top of the roughly $300 billion remaining in the current Troubled Asset Relief Program, according to an estimate by former Federal Reserve economist Ward McCarthy. That will be an even tougher sell for the new president than the stimulus plan, which is headed for a Senate vote this week after passing the House with no Republican support.

That package, at least $780 billion of spending and tax cuts aimed at boosting consumer demand and creating jobs, is just a part of what it will take to pull the economy out of the 14- month-old recession. The stimulus will be effective only if credit markets, currently frozen by illiquid assets clogging banks’ balance sheets, begin to function again.