Budget 2017: PM Narendra Modi orders DIPP to focus on impactful steps for economy, job creation, but cost less

By: |
December 27, 2016 6:57 AM

The departments of commerce as well as industrial policy and promotion are focussing on measures that are important and yet have “limited budget implications.”

The panel involved in this exercise is headed by commerce secretary Rita Teaotia and comprises senior officials of both the commerce and industry ministries. (Reuters)The panel involved in this exercise is headed by commerce secretary Rita Teaotia and comprises senior officials of both the commerce and industry ministries. (Reuters)

The departments of commerce as well as industrial policy and promotion are focussing on measures that are important and yet have “limited budget implications” so that they can be considered for inclusion in the upcoming Budget papers, senior government officials told FE.

The process started after a directive from the Prime Minister’s Office (PMO) to identify all those steps that are crucial in terms of their potential impact on the economy and job creation and yet cost less to the exchequer, in addition to the usual “large measures”, said one of the officials.
“The aim is to go for particularly low-hanging fruit with limited budget implications,” said another official.

The panel involved in this exercise is headed by commerce secretary Rita Teaotia and comprises senior officials of both the commerce and industry ministries. The panels’s suggestions are supposed to be first reviewed by Cabinet secretary Pradeep Kumar Sinha before being sent to the PMO.

As part of this exercise, the panel has been looking at steps to further strengthen the Make-In-India and the Start-Up India programmes, and the Budget could reflect such measures, said one of the officials. Ease of doing business will again get prominence, with special focus on digitisation and more IT-enabled government processes.

One of the priority areas will be enhancing the country’s competitiveness in sectors like textiles and garments, capital goods, defence production, chemicals & petrochemicals, maintenance repair and overhauling of aircraft and ship repair and even information technology hardware could get utmost importance, one of the officials said.

Customs and excise duty rates on certain inputs, raw materials, intermediaries and components and certain other goods could be tinkered with in the Budget to prepare for the goods and services tax regime, which, analysts say, could be introduced only in September 2017 or later.

To promote Make In India, the Budget 2016-17 had decided to withdraw customs duties exemption on direct imports of specified goods by the central or state governments. Even the customs duty exemption on specified goods imported by contractors of the central govenrment or even the PSUs was withdrawn. The last Budget also raised the basic customs duty on certain capital goods from 7.5% to 10% and hiked it on metals like primary aluminium and zinc alloys from 5% to 7.5%.

The panels’s suggestions are supposed to be first reviewed by Cabinet secretary Pradeep Kumar Sinha before being sent to the PMO.

As part of this exercise, the panel has been looking at steps to further strengthen the Make-In-India and the Start-Up India programmes, and the Budget could reflect such measures, said one of the officials. Ease of doing business will again get prominence, with special focus on digitisation and more IT-enabled government processes.

One of the priority areas will be enhancing the country’s competitiveness in sectors like textiles and garments, capital goods, defence production, chemicals & petrochemicals, maintenance repair and overhauling of aircraft and ship repair and even information technology hardware could get utmost importance, one of the officials said.

Customs and excise duty rates on certain inputs, raw materials, intermediaries and components and certain other goods could be tinkered with in the Budget to prepare for the goods and services tax regime, which, analysts say, could be introduced only in September 2017 or later.
To promote Make In India, the Budget 2016-17 had decided to withdraw customs duties exemption on direct imports of specified goods by the central or state governments. Even the customs duty exemption on specified goods imported by contractors of the central government or even the PSUs was withdrawn.

The last Budget also raised the basic customs duty on certain capital goods from 7.5% to 10% and hiked it on metals like primary aluminium and zinc alloys from 5% to 7.5%.

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