NEW DELHI (Reuters) – India’s government exempted foreign and domestic equity investors from a tax hike on high earners on Friday, drawing praise from some analysts who said the decision would help halt an outflow of funds.

Finance Minister Nirmala Sitharaman last month raised an income tax surcharge on people earning more than 20 million rupees ($282,925.45) a year, under a package of measures meant to raise funds to fight an economic slowdown.

The changes rattled foreign portfolio investors who pulled out more than $1 billion from Indian markets last month, according to figures from the Securities and Exchange Board of India market regulator.

On Friday, Sitharaman said she would exempt the investors, drop plans for a surcharge on long and short-term capital gains, and provide 300 billion rupees of liquidity to housing finance companies to help revive the real estate sector.

The government was also working on ways to help the auto sector, including a plan to encourage the scrapping of old vehicles to boost sales, she said.

“These measures are aimed at boosting growth, we are open to suggestions, we want to speed up growth,” she said.

India’s GDP growth in January-March slid to a near five-year low of 5.8%, and most analysts expect data due later this month to show growth in April-June fell even further.

Domestic passenger vehicle sales, a key economic indicator, plunged an annual 31% in July – the steepest recorded pace of decline in nearly two decades.

Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai, called the minister’s announcements a “good sentiment booster for the Indian economy”.

“The withdrawal of enhanced surcharge on FPI is a big positive for Indian markets as it could reverse the outflows seen since post-budget. It should also help INR (Indian rupee) appreciation,” he added.

Deepak Parekh, chairman of HDFC, India’s largest private sector bank, welcomed the help for the housing sector.

“Banks have been reluctant to lend to HFCs (housing finance companies) and real estate companies which has led to stress in the sector,” he said.