Budget 2018: The MEIS is the most important export promotion scheme under which the government provides exporters duty credit scrip at 2%, 3% or 5% of their export turnover, depending upon products and shipment destinations.
Budget 2018: With greater emphasis on job creation through infrastructure building, the Modi government’s last full-year Budget before the 2019 general election could offer a package of incentives for rural, infrastructure and labour-intensive sectors, while retaining its focus on productive capital spending. Sectors like textiles and garments, agriculture, transport, housing and skill development will get a higher allocation in the Budget for 2018-19, and funds to promote exports will be enhanced, official sources told FE. Thanks to still-elusive private investments, the government will continue to pump in funds to prop up the economy. So allocation for capital spending could be raised around 10% to Rs 3.4-3.5 lakh crore for the next fiscal, against the 2017-18 Budget estimate (BE) of Rs 3.1 lakh crore. Total expenditure is expected to rise to around Rs 23.5 lakh crore in 2018-19, compared with almost Rs 21.5 lakh crore (BE) for this fiscal, said the sources.
Based on discussions with the finance ministry, a senior official expected the fund allocation to promote exports through two key schemes — the Merchandise Export from India Scheme (MEIS) and Services Exports From India —could see around a 30% jump, or an additional Rs 8,000 crore, for 2018-19 from a year earlier. The MEIS is the most important export promotion scheme under which the government provides exporters duty credit scrip at 2%, 3% or 5% of their export turnover, depending upon products and shipment destinations. However, the commerce department’s long-pending demand to scrap minimum alternate tax on special economic zones units is unlikely to be endorsed by the revenue department yet again, said one of the officials. The ministry of road transport and highways is learnt to have sought around Rs 75,000 crore of budgetary support for the next fiscal, against Rs 64,900 crore budgeted for 2017-18. Given the government’s focus on infrastructure, the ministry expects its demand to be met.
The outlay for the textile ministry could rise 10-15% in 2018-19 from the Budget estimate of Rs 6,227 crore for 2017-18. Allocation for skill development in this labour-intensive sector is expected to rise to Rs 500-600 crore from just Rs 174 crore for 2017-18. However, outlay for the remission of state levies scheme (RoSL), under which garment exporters get refunds from the centre against all the levies they pay at the states’ level, would be trimmed, as the GST has subsumed many taxes at the state level. The government had budgeted Rs 1,555 crore for RoSL for 2017-18. The allocation under the amended Technology Upgradation Fund Scheme (A-TUFS) could stay around the 2017-18 level of Rs 2,013 crore. The RoSL and A-TUFS made up for over a half of the allocation for the ministry for the current fiscal.
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While farm research could see a 10% increase in outlay from Rs 6,800 crore for 2017-18, the allocation for the overall agriculture sector could be raised 5-10%, with some schemes like irrigation, will get better allocation than others.
To give a leg-up to housing, greater thrust will be laid on making the credit-linked interest subsidy scheme under the Pradhan Mantri Awas Yojana (Urban) for the middle-income group a success. So the scheme may offer more flexibility to people. MIG beneficiaries numbered just 9,944 and got a subsidy of Rs 204.6 crore, minister of state for housing and urban affairs Hardeep Singh Puri told the Lok Sabha last month. This was much lower than the Rs 1,000 crore of interest subsidy for MIG beneficiaries allocated in the last Budget.