To boost the exports from the country, the government has provided additional credit support of up to Rs 68,000 crore in the priority sector lending.
In a move to boost exports from India, Finance Minister Nirmala Sithraman has announced a slew of measures to benefit exporters in terms of liquidity, technology, credit and, the turnaround time for exports. Nirmala Sitharaman announced additional credit support of up to Rs 68,000 crore in the priority sector lending. Nirmala Sitharaman also underlined that higher insurance cover will be given by banks to lend working capital for exports, which will reduce the burden on exporters. In the press conference addressed by Nirmala Sitharaman, she mentioned that the government looks at improving the use of technology to reduce the turnaround time of exports and to make the refunds speedily, fully electronic refund mechanism for GST will come soon.
Nirmala Sitharaman added that the government will assign a senior official to work closely with the exports organisations to use concessional tariffs in their field. The move is aimed at utilising the special tariffs opportunity and to enhance awareness of preferential duty benefits to generate higher profits from exports.
Measures announced to boost exports:
- Scheme for remission for duties or taxes on export products: The FM has announced a scheme for remission for duties or taxes on export products (RODTEP), which will completely replace MEIS. Existing dispensation in textiles, MEIS and old ROSL, will continue till December 2019. Post this period, no MEIS will continue. RODTEP will be effective from January 1, 2020. The centre expects revenue to go up by Rs 50,000 crore the labour-intensive sector is expected to get priority.
- Electronic fund mechanism: To make the refunds speedily, fully electronic refund mechanism for GST to come soon.
- Export credit insurance scheme: In the field of export credit insurance scheme, higher insurance cover will be given by banks to lend working capital for exports, which will reduce the burden for exporters. The government expects that for USD based lending rates will come down by around 4 per cent and for rupee based lending the rates will come down by 8 percent.
- Additional exports credit for priority sector lending: For export credit, an additional Rs 36,000-68,0000 crore will be released for priority sector lending.
- Data on export finance will tracked through dashboard: The data on export finance will be monitored by an inter-ministerial working group which can be continuously tracked through a dashboard.
- Using technology to reduce time for exports: Nirmala Sithraman said that technology will be upgraded to reduce the time for exports. the turnaround time will also be monitored by an inter-ministerial group.
- Mega shopping festivals: FM Nirmala Sithraman added that India should hold mega shopping festivals for different themes such as gems and jewellery, handicrafts, etc by March 2020, to provide global thrust for people to come and see Indian products and eventually boosting the exports.
- Tapping the concessional benefits: The government will assign a senior official to work closely with the exports organisations to use concessional tariffs in their field. The move is aimed at utilising the special tariffs opportunity and to enhance awareness of preferential duty benefits.
- Adoption of mandatory technical standards: The government has insisted for a time-bound adoption of mandatory technical standards by industries. Nirmala Sitharaman added that a working group on standards will be set up in the Department of Commerce, which would enable Indian exports to avoid non-tariff barriers.
- Enabling handicraft industry to harness e-commerce portal: The government has underlined that enabling handicraft industry to harness e-commerce portal can boost to exports as several artisans can directly showcase their products online.
Meanwhile, in the housing sector, the government has provided additional liquidity support to HFCs, increasing the support from Rs 20,000 crores to Rs 30,000 crores. The government has also relaxed the norms of external commercial borrowings (ECBs). For a house building advance, interest rates will be reduced as the rates will be associated with 10-year G-sec yield. Nirmala Sitharman added that an organisation will be established to provide credit enhancement for infrastructure and housing.