6 Measures Taken by the Government to Revive the Economy
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Big hopes are pinned on Nirmala Sitharaman as India faces an economic slowdown and the responsibility to combat growth challenges falls on the Finance Ministry.
To spur business growth, Sitharaman on Saturday provided a shot in the arm to two most stressed sectors - Real Estate and Exports.
Here are 6 measures that the Government announced that could lend a hand in reviving revive the economy.
Financial Aid: The government will infuse INR 20,000 crore affordable housing package to benefit around 3.5 lakh home owners. The government has proposed a special financing window in a bid to restore stuck housing projects.
NIIF: The government will invest INR 10,000 crore under National Investment Infrastructure Fund (NIIF) whereas the rest of the investors like LIC, DFI and SWF (Sovereign Wealth Funds) will put in the rest balance of INR 10,000 crore. According to a press release by the Finance Ministry, the package announced will help extricate more than a third of such distressed homeowners.
Automated Electronic Refund System: The government will provide automated electronic refund system for paying GST credits to businesses; the move will be implemented by September.
RoDTEP: The government announced the introduction of a new scheme for remission of duties or taxes on export product (RoDTEP) to replace the existing Merchandise Exports from India Scheme (MEIS) from January 1 next year and revised priority sector lending norms for export credit that will release an additional INR 36,000 crore to INR 68,000 crore as export credit under priority sector. The new scheme is expected to benefit all products including textiles is more beneficial to the industry.
INR 1,700 crore for Export Guarantee: Granting relief to MSMEs , government also made a statement regarding Export Credit Guarantee Corporation (ECGC) will increase the scope of Export Credit Insurance Service to offer higher insurance cover to banks lending working capital for exports. This is expected to reduce overall cost of export credit including interest rates, especially to MSMEs.
Annual Mega Shopping Festivals: Dubai-like annual mega shopping festivals are proposed to be organised in 4 places in India across March 2020 in 4 themes (gems & jewellery, handicrafts, yoga, tourism, textile and leather).
This is the third stimulus package announced by the Finance Ministry amid slowing economy and economic prospects. After a wide slump in the Gross Domestic Product figure that stood at 5 per cent, the government has been reeling under the pressure of slow demand, an ailing automobile industry and small and medium battered by the impact of Goods and Services Tax and demonetization, which led to an extreme crunch in liquidity in the market.
Tax laws last month pushed foreign investors away and the stock markets suffered massive losses as institutional investors pulled back investments.
The government is confident of these fresh proposals to show early signs of the economic pick up, which the Finance Ministry note said is expected in the coming quarter.