Addressing a press conference on Saturday, 14 September, Finance Minister Nirmala Sitharaman announced a slew of new measures to stimulate a faltering economy. She made announcements regarding boosting exports, the housing market and controlling inflation.
India's GDP growth had decreased to 5 percent in the second quarter of 2019, the lowest in six years. The economic slowdown came in conjunction with the slow growth of domestic demand.
The government has already announced several measures in the last month to combat the situation.
Here are the key highlights of Sitharaman's latest press conference:
Boosting Exports:
- Remission of Duties or Taxes on Export Product (RoDTEP) – a new scheme to incentivise exporters at an estimated cost of Rs 50,000 crore to the exchequer.
- A fully automated electronic refund route for input tax credits (ITC) in GST will be implemented by the month-end.
- Revised priority sector lending (PSL) norms for exporters which will release an additional funding of Rs 36,000 crore to Rs 68,000 crore to them.
- Export finance will be actively monitored by an inter-ministerial working group in the Department of Commerce.
- Export Credit Guarantee Corporation (ECGC) will expand the scope of export credit insurance scheme.
- The minister said the initiative is expected to cost Rs 1,700 crore annually and will enable reduction in overall cost of export credit including interest rates, especially to MSMEs.
- Free Trade Agreement (FTA) Utilisation Mission will be set to help exporters optimally utilise the concessional tariffs under trade pacts which India has signed with several countries.
- Annual mega shopping festivals will be organised in the country at four places focusing on sectors like handicraft, yoga, tourism, textiles and leather.
Housing:
- A Rs 10,000 crore special window to provide last-mile funding for completion of ongoing housing projects which are not NPAs or facing bankruptcy proceedings under NCLT to help in completion of affordable and middle income housing projects.
- The interest rate on housing building advance will be lowered and linked to the 10-year government securities (G-sec) yields.
- External commercial borrowing (ECB) guidelines will also be relaxed to help housing developers obtain overseas funds and to facilitate financing of homebuyers who are eligible under Pradhan Mantri Awas Yojna, in consultation with the central bank.
Controlling Inflation:
- Finance Minister Nirmala Sitharaman said that inflation is under control and “there is a clear sign of revival of industrial production.”
- Inflation has been kept "very much" below 4 percent, she said.
- She also said that the steps announced to increase credit flow to non-banking finance corporations (NBFCs), including the partial credit guarantee scheme, has started showing results.
- Sitharaman will be meeting heads of public sector banks on 19 September, a day before the GST Council meeting in Goa, to grasp the credit flow scenario to the economy.
(With inputs from PTI)
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