Govt unveils 3rd eco booster, focuses on housing, exports
20,000cr Fund To Help Finish Held-Up Flats
New Delhi: The government on Saturday announced a set of measures to boost sagging exports, including a new WTO-compatible scheme to refund central and state levies. These measures were part of the government’s strategy to revive growth and exports which have slumped, triggering concerns about the health of the economy.
Finance minister Nirmala Sitharaman also unveiled steps to revive the sagging real estate sector and provide relief to homebuyers.
Sitharaman’s third booster shot for the economy came a day after the latest trade data revealed poor trade performance, with exports falling for the second time in three months, while imports have slid for three straight months now. One of the key announcements was a new scheme, Remission of Duties or Taxes on Export Product to replace Merchandise Exports from India Scheme.
The government will also set up a nearly Rs 20,000-crore
stress fund for completion of stalled affordable and middleincome housing projects that have not been classified as non-performing assets and are not facing insolvency action.
Sitharaman said RoDTEP, which follows a dispute at the WTO, with the US accusing the government of offering subsidies, will kick in from January with product-wise details to be announced over the next few weeks. RoDTEP will result in the government foregoing revenue of up to Rs 50,000 crore annually — 36% higher than the Rs 36,615 crore budgeted for MEIS.
The FM also announced an automated mechanism for refund of GST-related tax credit of exporters to address acomplaint that had not been addressed for over two years. “...If fully automated refund module can deliver GST refunds to exporters in a timely manner, this should go a long way in improving their working capital thereby providing much needed impetus to exports” said Harpreet Singh, a partner at consulting firm KPMG.
Akey initiative piloted by commerce and industry minister Piyush Goyal — cheaper and easier credit — was al
If fully automated refund module can deliver GST refunds to exporters in a timely manner, this should go a long way in improving their working capital
so part of Sitharaman’s 24slide presentation, which will help exporters access rupee-based loans at around 7.6%, while forex loans may cost around 3.5%. The Rs 1,700-crore initiative will see the Export Credit Guarantee Corporation expand the scope of the Export Credit Insurance Scheme. With the RBI’s support, adequate forex resources will be made available at reasonable cost to banks, which will support expansion of export credit at lower rates, said an official.
“The scheme will provide much-needed support to exporters for exporting to countries with little or more risks,” said FIEO president S K Saraf.
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To be linked to 10-year govt bonds, which is currently at 6.63%