Finance Minister Nirmala Sitharaman on Saturday announced a few measures to boost exports and real estate.
To boost exports a new scheme to incentivise exporters and a higher insurance cover to banks lending was announced. This means that lending would become easier as the bank export credit was risen by Rs. 36,000 crore to Rs. 68,000 crore.
The steps are suppose to promote exports as the government plans to triple the country’s annual exports to $1 trillion in the next five years.
The Finance Minister also announced the replacement of Merchandise Exports from India Scheme (MEIS) with Remission of Duties or Taxes on Export Product (RoDTEP). Ms. Sitharaman claims that this isn’t just a name change, instead this would “incentivise exporters” than the current scheme.The existing dispensations will continue till December 31, and new scheme will come into force from January 1.
The textile industry would would enjoy incentive upto 2 percent even after the scheme will transit into the RoDTEP from January 1st.
Other steps included digitalisation of certain services to reduce turnaround time. Ms. Sitharaman announced a “fully electronic refund module” from the end of September, for quick and automated refund of input tax credit under Goods and Services Tax (GST).
The estimated amount of revenue that the government will forego on the scheme is Rs. 50,000 crore.
In order to boost exports Ms. Sitharaman unveiled the government’s plan to hold “mega shopping festivals” in four destinations by March 2020 to facilitate exchange between global producers and consumers. Much like Dubai’s annual mega shopping festival.
India’s exports dropped to 6.05 percent last month at $26.13 billion.
For the real estate sector Ms. Sitharaman announced a special window of Rs. 10,000 crore to boost affordable and middle-income housing. The government will make this funding available for housing projects that are stuck but not in a bankruptcy process or classified as non-performing assets (NPAs).
She added that the objective focuses to finish construction of unfinished units.
Apart from this, the government would relax external commercial borrowing (ECB) guidelines to help housing developers obtain overseas funds. Also the interest rate on housing building advance will be lowered and linked to the 10-year government securities yield.
The announcements on Saturday were the third set of announcements to revive the declining economy. On August 23rd the Government announced the withdrawal of higher taxes on foreign investors that were announced in her Budget for 2019 and later the merger plan for 10 state-run banks.
Source : Various