On September 14, 2019, Union minister of finance & corporate affairs Smt. Nirmala Sitharaman made another presentation on the measures to boost economic growth. Earlier the announcements were made on August 23 and 30, 2019 regarding the series of measures to enhance economic growth of India.i. Over Rs 70,000 crore package for the exports and real estate sectors was announced, including setting up of a stressed asset fund.
ii. Inflation has been kept very much below the 4% mark.
iii. Buying new homes will become easier and more affordable in the country as Rs 10,000 crore special window has been announced.
Following are the measures launched by the Government recently and follow ups have been done:
- The E-assessment Scheme (Launched under section 143(3A) of the Income Tax Act 1961 notified on 12.09.2019)
- Document Identification Number (DIN) (Circular No.19/2019 issued on 14.08.2019)
- Compounding of Past Offences (Circular No. 25/2019 issued on 09.09.2019)
- Prosecution Easing Measures (Circular No. 24/2019 issued on 09.09.2019)
- Partial credit guarantee scheme for banks to buy assets of Non-Banking Financial Companies (NBFCs) has been implemented.
- Measures are being taken to improve credit outflows from banks.
- Transmission of interest rate cuts are being effected by banks
Measures to boost exports
Export promotion measures taken by the government in the last few years were highlighted in the presentation. The new measures include the following:
Category: Incentives and Taxation
Extension of Reimbursement of Taxes & Duties for Export promotion scheme
- Scheme for Remission of Duties or Taxes on Export Product (RoDTEP) will replace Merchandise Exports from India Scheme (MEIS). It will come into effect from January 1, 2020.
- Existing dispensation in textiles of MEIS + old Rebate of State Levies (RoSL) will continue up to 31.12.2019
- Textiles and all other sectors which currently enjoy incentives upto 2% over MEIS will transit into RODTEP from January 1, 2020.
- In effect, RODTEP will more than adequately incentivize exporters than existing schemes put together.
- Revenue foregone projected at up to Rs. 50,000 crores.
- The government is already providing Rs 40,000-45,000 crore refunds under existing schemes.
Fully automated electronic refund route for Input Tax Credits (ITC) in GST
- Fully electronic refund module (FORM GSAT RFD-01) for quick and automated refund of Input Tax Credits(ITC) in Goods and Service Tax (GST) is near completion and will be implemented by the end of September 2019.
- This is expected to monitor and speed up ITC refunds.
Category: Export Finance
Expanding scope of Export Credit Insurance Scheme (ECIS) by ECGC
- Export Credit Guarantee Corporation (ECGC) will expand the scope of Export Credit Insurance Scheme (ECIS).
- It will offer higher insurance cover to banks lending working capital for exports.
- Premium incidence for Micro, Small and Medium Enterprises (MSMEs) will be moderated suitably.
- It is expected that the initiative will cost about Rs 1700 crper annum.
- This will enable reduction in overall cost of export credit including interest rates, especially to MSMEs.
Revised Priority Sector Lending (PSL) norms for Export Credit
- Priority Sector Lending (PSL) norms for Export credit have been examined and enabling guidelines are under consideration of the Reserve Bank of India (RBI).
- This will release an additional Rs. 36,000 crores to Rs 68,000 crores as export credit under priority sector.
Effective monitoring of Export Financing by Department of Commerce
- Data on Export Finance is regularly published by RBI.
- Export Finance will be actively monitored by an Inter Ministerial Working Group in Department of Commerce, tracked through a dashboard, reviewed with institutions and active intervention will be carried out.
Category: Export Facilitation
Leverage technology to reduce “Time to Export or Turn-around time”
- Technology will be further leveraged by timely completion of ongoing initiatives to further reduce “Time to export” – through seamless process digitization of all export clearances (port/airport/customs, etc) and elimination of offline/manual services.
- An action plan to reduce Time to export/turn-around time in airports and ports benchmarked to international standards will be implemented by December 2019.
- Actual turnaround times will be published in real time for each port and airport to push them to improve performance
- An Inter-Ministerial Group will be made accountable for this.
Annual mega shopping festivals
A mega shopping festival similar to the world-famous Dubai Shopping Festival, will be conducted at 4 places in India in March 2020 on themes of gems and jewellery, handicraft/yoga/tourism, textiles and leather.
Category: Free Trade Agreements (FTA)
Special FTA Utilisation Mission
- FTA Utilisation Mission, headed by a Senior officer in the Department of Commerce, will be set up to work exclusively with Federation of Indian Export Organisations (FIEO) and export houses and to utilise concessional tariffs in each FTA.
- It will enhance awareness of preferential duty benefits among MSMEs, disseminate and facilitate compliance requirements (Rules of Origin/ Certificate of Origin, etc.) under FTAs for importers and exporters.
- It will set goals for FTA utilization and put in place an effective FTA monitoring system.
Online “Origin Management System”
- An Online “Origin Management System” for exporters to enable them to obtain Certificates of Origin – CoO (under Rules of Origin) will be launched in the next few weeks by Directorate General of Foreign Trade (DGFT) in collaboration with Exports Inspection Council (EIC).
- This is expected to significantly improve ease of doing business for exporters.
Time bound adoption of mandatory Technical Standards
- A Working Group on Standards will be set up in the Department of Commerce to work with industry to lay down a roadmap for adoption of Standards, time lines and enforcement.
- This is expected to be a big boost in enabling Indian products overcome Non-tariff barriers in exports.
Affordable testing and certification infrastructure
- Affordable testing and certification infrastructure will be adequately expanded and developed in Public-Private Partnership (PPP) mode to enable exporters to get all internationally accepted tests and certification to be done within India.
- This will reduce costs of adoption of standards and certification for Indian exporters to meet national standards of FTA partners.
Enable handicrafts industry to effectively harness e-commerce for exports
- Special dispensation for facilitating and on-boarding handicrafts artisans and handicraft cooperatives directly on e-commerce portals and enable seamless exports.
- Mass enrollment of artisans across India with help of M/o Textile and organisations like Tribal Cooperative Marketing Development Federation of India Limited (TRIFED), Cottage Industries Exposition Ltd (CIE) etc.
Measures to Boost Housing Sector
Relaxation of ECB guidelines for Affordable Housing
- ECB- External Commercial Borrowing guidelines will be relaxed to facilitate financing of home buyers who are eligible under the Pradhan Mantri Awas Yojana (PMAY) in consultation with RBI.
- This is in addition to the existing norms for ECB for affordable housing.
House Building Advance
- The interest rate on House Building Advance shall be lowered and linked with the 10 Year Government Securities (G Sec) Yields.
- Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses.
Special Window for affordable and middle income Housing
- A Special Window to provide last mile funding for housing projects which are non- NPA (Non Performing Assets) and non-National Company Law Tribunal (NCLT) Projects and are Net worth positive in affordable and middle income category to be set up.
- The objective is to focus on construction of unfinished units.
- Union government on the lines of National Investment and Infrastructure Fund (NIIF), can contribute to the fund while the rest of the investors would be LIC (Life Insurance Corporation of India) and other institutions and Private capital from banks / sovereign funds /development finance institutions (DFIs) etc.
- The Fund shall be set up as a Category – II AIF trust and would be professionally run with experts from Housing and Banking Sector.
- Stress fund of Rs 20,000 crorefor real estate: It will provide last-mile funding for housing projects that are not in bankruptcy court or already tagged as bad debt and will benefit nearly 8.5 lakh home buyers.
- Fund size : 10,000 croreto be contributed by GOI and roughly the same amount from outside investors.
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♦ Headquarters: New Delhi
♦ Founded: 29 October 1946