Centre to put a check on imports via strict norms
Apart from raising import duties on hundreds of goods, the government has also added tougher provisions to all Customs rules in order to tighten the screws on imports. A string of measures includes specific provisions in rules governing anti-dumping, safeguards, as well as basic Customs duties.
A case in point, when importing from countries which have already been slapped with anti-dumping duties: an importer may fall foul of the rules if the imported product in an unassembled form is less than 35 per cent of the value addition, compared to its manufacturing cost.
The latest rules also stipulate that for calculation of value addition, expenses on account of procurement of technology, such as patent, copyright, trademark, royalty, technical know-how, etc, shall not be included in the value of the parts brought in. On the other hand, when importers bring in an item already subject to anti-dumping duties from a nation which hasn’t been slapped with such duties, they run the risk of violating the law. According to the latest diktat, they ‘can’t change their trade practice, pattern of trade or channels of sales of the article’ suddenly. However, traders said this will leave them open to unfair prosecution by Customs officials at the ground level. The government has also said in cases where imports of a product from more than one country are being simultaneously subject to anti-dumping investigation, the government will cumulatively assess the effect of such imports in certain cases.
Government allocation for infrastructure does not tie in with the road map laid down by the National Infrastructure Pipeline (NIP), which projected about ~4.9 trillion and ~6.7 trillion for FY20 and FY21, respectively.
In her second Budget, Union Finance Minister Nirmala Sitharaman proposed an allocation of ~1.7 trillion for transport infrastructure in FY21.
In the highways sector, the debt of the National Highways Authority of India (NHAI) has weighed down on the projections for next year. The borrowing limit for the body has been reduced by about 13.3 per cent to ~65,000 crore. This is the first reduction in the last few years.
While budgetary support by the government for the NHAI has risen ab out 16 p er cent, the outlay is down around 4 per cent to ~1.075 trillion from about ~1.1 2 trillion in 2019-20.
Budgetary support for the authority in the current fiscal year is ~36,691 crore, and it has been raised to ~42,500 crore in FY21.
The overall plan outlay for roads and bridges is about ~1.43 trillion, for which government support is ~77,245 crore.
“The NIP for 2019 -2025 has pegged the projected capital expenditure for transportation (covering roads, railways, ports, and airports) at about ~35.7 trillion, of which about ~4.9 trillion and ~6.7 trillion were projected for FY20 and FY21. In the Budget, the finance minister proposed an allocation of ~1.7 trillion for transport infrastructure for
FY21. This is marginally higher than the ~1.6 trillion in the previous year’s Budget,” said Peeyush Naidu, Partner, Deloitte India.
The decrease in the NHAI borrowing target seems to be because of worries on its debt burden. This will, however, mean that government dependence on private investment will increase.
Railways and roads account for nearly 30 per cent of the capital outlay while defence accounts for 30 per cent of budgetary support.
The NIP, wor th ~1 .03 trillion, consists of more than 6,500 projects, which range across sectors and are classified in accordance with t heir size and stage of development.
These new projects i nclude housing, safe drinking-water, access to clean and affordable energy, health care for all, world-class educational institutes, modern railway stations, airports, bus terminals, metro and railway transportation, logistics and warehousing, and irrigation projects.