Govt. unveils package to boost exports, revive housing sector 

Prelims: Indian Economy

Mains: GS Paper III – Indian Economy   

Measures to Boost Export, revive affordable housing

A.     INCENTIVES AND TAXATION

1.      Scheme for remission of duties or taxes on Export Product

•      It will offset the amount paid by exporters as duty on exports.

•      Replace the merchandise Exports from India scheme

•      Revenue foregone projected at up to Rs. 50,000 crores

2.      Fully automated electronic refund route for Input Tax Credits (ITC) in GST

•      Implemented by September end

•      This is expected to monitor and speed up ITC refunds.

B.     EXPORT FINANCE

3.      Expanding scope of Export Credit Insurance Scheme (ECIS) by ECGC

•      Export Credit Guarantee Corporation (ECGC) will expand the scope of ECIS.

•      Will offer higher insurance cover to banks lending working capital for exports.

•      Premium to be paid by MSMEs will be moderated.

•      It is expected that the initiative will cost about Rs 1700 cr per annum.

•      This will enable reduction in overall cost of export credit including interest rates, especially to MSME

4.      Revised Priority Sector Lending (PSL) norms for Export Credit

•      Priority Sector Lending (PSL) norms for Export credit have been examined and enabling guidelines are under consideration of RBI

•      This will release an additional Rs. 36,000 crs. to Rs 68,000 crores as export credit under priority sector.

5.      Effective monitoring of Export Financing by Department of Commerce

•      Data on Export Finance is regularly published by RBI

•      Export Finance will be actively monitored by an Inter-Ministerial Working Group in Department of Commerce, tracked through a dashboard, reviewed with institutions and active intervention carried out

C.     EXPORT FACILITATION

6.      Leverage technology to reduce “Time to Export or Turn-around time” 

•      Technology will be further leveraged by timely completion of ongoing initiatives to further reduce "Time to export" - though seamless process digitization of all export clearances (port/airport/customs, etc) and elimination of offline/manual services

•      An action plan to reduce Time to export/turn-around time in airports and ports benchmarked to international standards will be implemented by Dec 2019.

7.      Annual mega shopping festivals in India will be organized in 4 places across 2020 March in 4 themes (Gems &Jewellery , Handicrafts/Yoga/Tourism, Textiles and Leather)

D.   FREE TRADE AGREEMENTS

8.      Special FTA Utilisation Mission

•      FTA Utilisation Mission, headed by a Senior officer in Department of Commerce, will be set up

•      To work exclusively with FIEO and export houses to utilise concessional tariffs in each FTA

•      Enhance awareness of preferential duty benefits among MSMEs, disseminate and facilitate compliance requirements (Rules of Origin/ Certificate of Origin, etc.) under FTAs for importers and exporters,

•      Set goals for FTA utilization and put in place an effective FTA monitoring system.

9.      An Online “Origin Management System” for exporters to enable them to obtain Certificates of Origin – CoO (under Rules of Origin) will be launched in the next few weeks by DGFT in collaboration with Exports Inspection Council. This is expected to significantly improve ease of doing business for exporters.

E.     ENGINEERING

10.   Time bound adoption of mandatory Technical Standards

•      Time bound adoption by Industry of all necessary mandatory technical standards and their effective enforcement to elevate the quality and performance ecosystem, enhance competitiveness and address the issue of sub-standard imports.

•      A Working Group on Standards will be set up in D/o Commerce to work with industry to lay down a roadmap for adoption of Standards, time lines and enforcement.

•      This is expected to be a big boost in enabling Indian products overcome Non-tariff barriers in exports.

11.   Affordable testing and certification infrastructure

•      Affordable testing and certification infrastructure will be adequately expanded and developed in PPP mode to enable exporters to get all internationally accepted tests and certification done within India.

•      This will reduce costs of adoption of standards and certification for Indian exporters to meet national standards of FTA partners

F.     HANDICRAFTS

12.   Enable handicrafts industry to effectively harness e-commerce for exports

•      Special dispensation for facilitating and on-boarding handicrafts artisans and handicraft cooperatives directly on e-commerce portals and enable seamless exports.

•      Mass enrolment of artisans across India with help of M/o Textile and organisations like TRIFED, CIE, etc.

HOUSING SECTOR

1.      Relaxation of ECB guidelines for Affordable Housing.

•      ECB guidelines will be relaxed to facilitate financing of home buyers who are eligible under the PMAY, in consultation with RBI.

•      This is in addition to the existing norms for ECB for affordable housing.

2.      House Building Advance

•      The interest rate on House Building Advance shall be lowered

•      Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses.

3.      Special Window for affordable and middle income Housing

•      A Special Window to provide last mile funding for housing projects which are non- NPA and non-NCLT Projects and are Net worth positive in affordable and middle income category to be set up.

•      The objective is to focus on construction of unfinished units.

•      GOI on the lines of NIIF, can contribute to the fund while rest of the investors would be LIC and other institutions and Private capital from banks / sovereign funds / DFIs etc.

•      The Fund would be professionally run with experts from Housing and Banking Sector.

•      Fund size : 10,000 crore to be contributed by GOI and roughly same amount from outside investors.