Finance Minister addresses issues of Homebuyers and exporters
Finance Minister Nirmala Sitharaman on 14th September 2019 announced measures for boosting exports and helping home buyers who are waiting for their houses to be constructed and delivered. Some important announcements include:
Scheme for the remission of duties or taxes on export products (RODTEP): This will completely replace MEIS and old ROSL. The existing old ROSL and MEIS scheme will continue till 31 Dec 2019. Merchandise Exports from India Scheme (MEIS) under Foreign Trade Policy of India (FTP 2015-20) is one of the two schemes introduced in Foreign Trade Policy of India 2015-20, as a part of Exports from India Scheme. (The other scheme is SEIS, Service Exports from India Scheme). From 1st Jan 2020, only RODTEP will be effective. This includes textile as well as commerce ministry. This will adequately incentivize the exporters. For this revenue foregone amounts to Rs 50,000 cr p.a. No sunset clause of this scheme.
- Fully automated GST and other tax refunds
- Export Credit Insurance Scheme: Enhancement in the credit insurance scheme. The premium for the guarantee by ECGC for MSMEs will attract less premium. This will also result in lower interest rates on borrowing by exporters.
- Priority sector lending for exporters: This will release approx. Rs 36k cr to Rs. 68k cr released
- Data on export finance will be regularly published by RBI. Effective Monitoring of export finance.
- Leverage technology to reduce time to export turn-around time
- India shall organize Annual Shopping Fests by March 2020. This will be similar to Dubai shopping fest etc. A different theme like handicrafts, Gems and Jewellery, leather, Yoga etc will be organized. This will attract foreign tourists and improve handicrafts/textile/jewelry exporters.
- Special FTA utilization mission – Preferential duty benefits will be available
- An online platform will be launched to enable to obtain a certificate of origin, etc. This will improve the ease of business.
- Time-bound adoption of mandatory technical standards
- Affordable testing
- Handicrafts linking with e-commerce will be incentivized.
The FM has so far taken various steps for the revival of Real Estate like providing credit supports or liquidity management of HFC, Tax benefits on Affordable Housing scheme etc in the budget. In the current meeting, the FM announced two major measures for the benefit of homebuyers that will improve their capacity to buy affordable houses. A measure is also introduced for the homebuyers whose houses are still under construction and is delayed.
- Relaxation of ECB guidelines for affordable housing: Guidelines pertaining to External Commercial Borrowings will be relaxed. This will include changes in the constraints of raising ECB for eg. the area of the flat for which a person can raise ECB will be changed.
- Special window for affordable and middle-income housing: An announcement of special window has been made for the houses which are under construction and are delayed and the home buyers are awaiting possession. The Special window wilaim at assisting the projects that are not yet declared as NPA or not before NCLT ( National Company Law Tribunal). This professionally run scheme will provide assistance to the projects. GOI to contribute Rs 10,000 cr and equal contribution by outside investors will be done in this new scheme.
Apart from these schemes, the FM presented the macroeconomics overview mentioning that :
- Inflation is under control
- Industrial production is getting revived based on July 19 numbers
- A revival of fixed investments is witnessed
- The fiscal deficit is getting improved
- Robust FDI inflows and High Foreign Exchange reserves