NEW DELHI: The Finance Minister has made yet another round of announcements on Saturday (Sept.14), the focus area this time being the two major pain points of the economy – exports and real estate.
Having announced steps to encourage credit flows to NBFCs and mega bank mergers and their frontloaded recapitalisation in the previous two rounds, the FM has come out with more recommendations on Saturday aimed at boosting the lacklustre export markets and the real estate sector that has been languishing for a while.
At the heart of the announcements this round were a new scheme for remission of duties or taxes on export product (RoDTEP), revision of priority sector lending norms for export credit and a move to establish a funding window to help the ailing real estate projects that await additional support.
RoDTEP will replace the existing Merchandise Exports from India Scheme (MEIS) from January 1 next year. The FM expressed hope that the tweaking of the priority sector lending norms for export credit will release an additional Rs36,000 crore to Rs68,000 crore towards export credit.
On the credit flow and interest rate transmission, the FM said she had called for a meeting of the bankers next week
Though the new real estate window, the government hopes to provide Rs20,000 crore to support the last mile funding of the unfinished housing units falling under the affordable and middle income housing sector.
The minster said this will cover around 3.5 lakh unfinished housing units where the work has stopped for want of funds.
The new package of measures for exports sector came in six different silos and covered steps that would comprehensively address the tax and duties refunds for exporters; improve credit flow to the export sector and the launch of a special free trade agreement (FTA) utilisation mission.
FM said India will also now host annual mega shopping festivals in 4 places on the lines of Dubai Shopping Festival (DSF), which has become a big hit attracting millions of people there from the world over, especially from India..
Sitharaman said the RoDTEP would span all the sectors and the revenue foregone by the government could be in the region of Rs50,000 crore. “I can’t put an exact figure on this as the duty remission will vary from sector to sector. With the introduction of RoDTEP, all uncertainties over continuation of MEIS is over”, Sitharaman said.
Dwelling on the new window to extend funding to the ailing real estate projects, the FM explained that a Rs20,000 crore fund (Rs10,000 crore from Government and roughly same amount from outside investors) would be set up to provide the last mile funding in the affordable and middle income housing sector.
“However, this fund will be used to support only projects that fall under non-NPA and non-NCLT, and the objective is to focus on construction of unfinished units,” she added.