Union Finance Minister Nirmala Sitharaman on Saturday unveiled over Rs 70,000 crore of measures for exporters and the real estate sector, including about Rs 30,000 crore new spending in plans such as setting up of a stressed asset fund, as part of efforts to boost economic growth from a six-year low.
While measures to boost exports include remission of duties, higher insurance coverage and technology enablement to cut downtime at ports, for real estate sector a Rs 20,000 crore fund – with half of the money coming from the government – will be set up to provide last-mile funding for housing projects that are not in bankruptcy courts or already tagged as bad debt.
The remission-based incentive scheme for export of goods would involve Rs 50,000 crore of outgo, higher than the Rs 40,000-45,000 crore budgeted in existing plans that it is replacing.
At a press conference called to announce the third and final set of measures to address stress in specific sectors and bolster growth, Sitharaman said housing finance companies have been allowed to borrow funds from abroad at relaxed rules while interest rate on housing building advance has been lowered, benefiting government servants who make up for a major component of demand for houses.
Exports have declined in two out of last three months despite a weaker rupee, while the shock 2016 demonetisation of 86 per cent of the currency in circulation and introduction of the GST had dented the real estate market.
The stressed asset fund, which is to be used to provide finance to affordable housing projects, will benefit around 3.5 lakh homebuyers, Sitharaman said, adding that buyers stuck in bankruptcy-bound projects will get relief through the NCLT route.
For exporters, a new scheme for reimbursement of taxes paid on exports, called the remission of duties or taxes on export product, will come into effect from January 2020 to replace existing dispensations.
The new RoDTEP “will more than adequately incentivise exporters than existing schemes put together,” she said.
Besides, a Rs 1,700-crore annual dole will allow Export Credit Guarantee Corp to offer higher insurance cover to banks lending working capital for exports, she said. This will enable reduction in the overall cost of export credit including interest rate, especially for MSMEs, she added.
Priority sector lending tag for export credit is under consideration of the Reserve Bank of India, which will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit.
Other measures for exporters included real-time electronic processing of GST refunds by the month-end, action plan to reduce time to export or turnaround time at airports and ports by December and a special FTA utilisation mission that will work with export houses to utilise concessional tariffs in each free trade agreement India has with different nations.
She also announced that a mega shopping festival, on the likes of the world-famous Dubai Shopping Festival, will be conducted at four places in India in March on themes of gems and jewellery, handicraft/yoga/tourism, textiles and leather.
The Finance Minister said the measures together with the ones announced on the previous two occasions will help lift the economy and growth rate will improve in the second quarter of this fiscal.
Inflation, she said, has been kept “very much” below the 4 per cent mark and there are “clear signs” of revival in the economy, as witnessed in an uptick in industrial production and fixed investment.
Measures are being taken to improve credit outflow from banks, which have also begun to transmit interest rate cuts to borrowers, she said. Sitharaman will meet heads of public sector lenders on September 19 to review the transmission.