Union Finance Minister Nirmala Sitharaman on Saturday announced a slew of new measures to revive the economic growth in the country.
Sitharaman said inflation was under control and that there was a clear sign of revival of industrial production. However, government data released on Thursday showed that retail inflation rose to 3.21% in August, the highest in 10 months.
“As far as industrial production is concerned, a clear sign of revival is being witnessed in the first quarter until July end, which ensures revival sign is consistent,” she said at a press conference. “Revival of fixed investments is also showing a good picture as compared between 2017-18 and 2018-19.”
She also announced several incentives for affordable and middle class housing. Sitharaman said that a special window will be established to provide last-mile funding for housing projects that are stalled due to a cash shortage. But the projects must not be non-performing assets or facing bankruptcy proceedings under the National Company Law Tribunal.
The finance minister added that the government will contribute Rs 10,000 crore to the fund and roughly the same amount will come from outside investors.
India’s economic growth rate had slipped to 5% in the April-June quarter, the lowest in over six years. On August 23, Sitharaman had announced a set of measures to prop up the economy, less than two months after presenting the Union Budget. The Reserve Bank of India also announced that it would give the Centre Rs 1.76 lakh crore of its dividend and surplus reserves.
In the last few months, core sectors such as automobiles and manufacturing have witnessed a progressive slowdown in growth due to weakened consumer demand and dearth of investments.
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Sitharaman also announced measures to promote exports. She said the remission of duties or taxes on export products will replace the Merchandise Exports from India Scheme from January 1, 2020. The new scheme will completely replace MEIS for all goods and services for which coverage was given by the textile and commerce ministries. “Since exporters already have taken up orders, we are giving them more time,” Sitharaman said, adding that the scheme will result in an estimated cost of Rs 50,000 crore to the exchequer.
Other measures for exporters included fully electronic refund of input tax credit from month end, action plan to reduce the time to export, or the turn around time, at airports and ports by December, and a special free trade agreement utilisation mission that will work with export houses to utilise concessional tariffs in each agreement that India has with different nations.
She said India will start four mega shopping festivals like the ones organised in Dubai to boost small and medium scale enterprises. These shopping festivals would be held at four locations across the country in March 2020, she said, adding that the festivals will be based on themes such as gems and jewellery, yoga, tourism, and textiles and leather.
The announcements were the third in a series by the finance minister to bolster flagging growth. Earlier Sitharaman had unveiled a mega plan to merge 10 public sector banks into four entities with robust balance sheets, withdrew higher taxes for foreign portfolio investors, gave startups exemption from angel tax, and a package to address distress in the auto sector and upfront infusion of Rs 70,000 crore to public sector banks.
Sitharaman will meet public sector chiefs on September 19.
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