Finance Minister Nirmala Sitharaman on Saturday announced a set of measures to stimulate the economy. She stated that inflation is under control and that there is a “clear sign of revival in industrial production”.
She is expected to meet Public Sector Banks (PSB) chiefs on September 19 regarding the issue of credit flows.
In her press briefing, the Nirmala Sitharaman announced sops for exports and replacement of Merchandise Exports from India Scheme (MEIS) by Remission of Duties or Taxes on Export Product (RoDTEP).
The new scheme would incentivise exporters at an estimated cost of Rs 50,000 crore to the exchequer. However, Nirmala Sitharaman noted that MEIS for textiles will go on till December 31.
India will also hold annual mega shopping festivals such as Dubai Shopping Festival to boost the export sector.
The announcements come in the wake of a sharp slowdown in the economy with the auto and real estate sector suffering the most.
The recent measures announced by Nirmala Sitharaman include front-loading of public expenditure and improved access to credit for business and infusion of capital into state-run banks to promote credit.
The Reserve Bank of India has slashed the projected GDP for this year to 6.9%, while the majority of analysts and financial institutions have projected it to be 6.5-7% growth.
Nirmala Sitharaman contended that inflation has been kept below 4%.
Some key announcements:
For exports, Scheme for Remission of Duties or Taxes on Export Product (RoDTEP) will be replacing the MEIS scheme. However, MEIS scheme will continue till 31 December. Up to Rs 50,000 crore will go through new RoDTEP scheme.
A fully electronic refund scheme on input tax for exporters would be in effect by end of this month. The move will catalyse input tax credit refunds for exporters, said Nirmala Sitharaman
Priority Sector Lending (PSL) norms have been revised for export Credit. This will release an additional ₹36,000 crore to ₹68,000 crore as export credit under the priority sector.
Export finance to be actively monitored by an inter-ministerial working group in the Department of Commerce.
Free Trade Agreements (FTA) Utilisation Mission, which would be headed by a senior officer in the Department of Commerce, will be set up.
An annual mega shopping festival like Dubai Shopping Festival will be held to boost exports.
Handicrafts industry will be enabled to effectively harness e-commerce for exports.
To provide funding to incomplete housing projects, Rs 10,000 crore window has been announced.