Jakarta. Indonesia's second economic stimulus policy package announced on Tuesday received a better response compared to its predecessor, providing positive sentiments to the Indonesia's benchmark stock index and leading to a rebound at the day's closing.

Analysts were not as pessimistic in assessing the potential impacts to the economy, although the business community remains cautious about the implementation on the ground.

The stimulus package includes interest tax cuts for exporters, fast-track business licensing for major investments in industrial estates and relaxation of taxes for the import of capital goods and the aviation industry.

Indonesian stocks rebounded on Tuesday's closing, with the benchmark Jakarta Composite Index rising 1.4 percent after slumping by 2.11 percent on Monday.

Trading volume was more intense on Tuesday, with 7.7 billion shares worth Rp 5.45 billion ($371,964) changing hands on the day. That compares to Monday, when 4.57 billion shares worth Rp 4.1 trillion were traded.

The rupiah was however, still on the decline, hitting a 17-year low of 14,730 to the dollar, according to Reuters data.

Ina Primiana, an economist from Bandung-based Padjajaran University, said providing a principal business license within three hours for "qualified" investors is possible.

"If the infrastructure and human resources, from the central to the regional government level, are ready; it is possible," said the economist, who is also a member of the Indonesian Chamber of Commerce's (Kadin) Institute for Economic Study, Research and Development (LP3ES).

The government will also have to provide adequate information about any supporting facilities, she said, including the availability of power sources, availability of labor in surrounding area and even the  specific size of land available in targeted areas.

Rusli Tan, deputy chairman at Indonesia Pulp and Paper Association said: "All of those policies ... we will only see the fruits [of our labors] in one or two years."

The pulp and paper industry, he said, is now facing "over capacity as demand is decreasing."

"The danger is right in front of our eyes, not two years from now," he added.

Joko's first stimulus package was announced in early September, but received a thumbs down from market players and analysts as it was seen to have little impact on pressing economic challenges.

The rupiah has weakened more than 15 percent this year, while the economy is expected to slow to less than 5 percent this year, the slowest pace in six years.

Meanwhile, the country's financial markets remain jittery on worries about China's economic slowdown and prospects of the US Federal Reserves raising its interest rate, which typically weighs on the dollar's liquidity in emerging markets like Indonesia.