India Inc hails Rs 70,000 Cr package to boost economy
Hailing the government's Rs 70,000 crore package for stressed exporters and real estate, India Inc on Saturday said the measures are decisive as well as comprehensive, and will provide a boost to the economy in near-term.
It also said that the announcements are in line with the industry expectations.
Finance Minister Nirmala Sitharaman announced about Rs 70,000 crore package for exports and real estate sectors on Saturday.
The package includes stressed asset fund of Rs 20,000 crore for housing projects, a new scheme for reimbursement of taxes paid on exports worth Rs 50,000 crore and Rs 1,700 crore dole for offering higher insurance cover to exporters.
"The Finance Minister's announcements are comprehensive and would give a boost to the economy in the near term. She has addressed issues in the two critical sectors that are facing distress exports and housing and the announcement are in line with industry recommendations," said CII Director General Chandrajit Banerjee in a statement.
In housing, relaxation of ECB guidelines and a fund for last mile funding for completion of housing projects are in line with industry demands, the statement noted.
"Urgent measures were needed to support exports, which have been declining in the current year. The new scheme to compensate exporters for all duties is going to help considerably. Additional measures such as provision of higher insurance cover, monitoring of export finance and turnaround times at ports and airports will go a long way in improving competitiveness of Indian exporters," Banerjee said.
Assocham also hailed yet another tranche of measures announced by Sitharaman to revive economic growth by addressing crucial sectors of exports and stressed residential real estate.
"The steps on helping exports should go a long way in making Indian exporters competitive in the global market which is becoming tougher by the day by a host of factors like non-tariff barriers in major economies of the world, the collateral damage of the US-China trade row and slowdown across different markets.
"Committing more credit to exporters, bringing down the turnaround time at the ports at par with global standards and making the tax rebate schemes WTO-compliant with particular focus on labour-intensive sectors like textile and handicraft would lift the sentiment in the export sector," Assocham President B K Goenka said.
The government is rightly addressing issue of tax assessment by moving towards e-assessment and removing the discretionary powers of individual officers, he noted. ''The Finance Minister has sent a clear signal to her tax officials to help the businesses and not take arbitrary actions. This is a laudable step."
Her also suggested that setting up of a stress Fund of Rs 10,000 crore can be leveraged up Rs 35,000-40,000 crore, which should fill in the last mile gap of funding for the incomplete projects.
Besides, the easing of norms for external commercial borrowing should encourage the housing finance companies to raise cheap funds from overseas and lend cheap back home for revival of the sector.
Confederation of All India Traders (CAIT) has lauded the package announced by Sitharaman to ensure speedy growth of exports and housing sector in the country. It said that the best part of the announcements is creation of various inter-ministerial working groups to monitor strict implementation of the announcements in a time bound manner.
CAIT National President B C Bhartia said that introduction of RoDTEP (Remission of Duties or Taxes on Export Product) will remove ambiguity of the exporters.
Announcement regarding observing specified standards not only for exports but for imports too will guarantee quality products. Reducing turnaround time will boost more exports as it will be a hassle free system now. Organising mega shopping festivals on the pattern of Dubai and Shanghai will prove to be a showcase of Indian products to the rest of the world, it added.
Bhartia further said that announcing fully electronic refund system in GST and e-assesments will benefit large number of traders and protect them from harassment, discretion and corruption.
Stress fund of Rs 10,000 crore for housing sector will help in meeting with liquidity crisis in housing sector, it added.
"...the government for its well-timed response in bailing out the real estate industry with a Rs 10,000 crore package to complete unfinished housing projects in affordable and middle income category.
"This will be a major boost for the sector and will promote employment generation in the short term. There will be a relaxation in External Commercial Borrowings (ECB) guidelines to facilitate the financing of homebuyers eligible under PMAY," Indian Chamber of Commerce President Mayank Jalan said.
"We look forward to similar supportive measures for the automobile sector," the chamber said.
(Edited by Evelyn Ratnakumar)