Mega Shopping Festival Announced By FM To Boost Economy

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The latest annual report of the RBI for the fiscal year 2018-19 (or FY19) confirmed that Indian’s economy is entering a deep crisis with latest GDP growth in April-June quarter was at a bare five percent– lowest in the past six years. This and a few recent controversial statements have put the pressure on Finance Minister Nirmala Sitharaman who held her third major press conference in a matter of a few days on September 14 at the National Media Centre in New Delhi.

Sitharaman set the agenda of the press conference in perspective as she spoke about a slew of measures to be taken by the government for the export industry and then in terms of home buyers. “I will also talk about signs of revival from some sectors. Then move over to talk about the steps followed up after the last two announcements and then commence by saying that tax-related measures to bring in technology into tax assessment in the sense that tax authorities are overreaching are completely wiped out of the minds because we have made quite a few concrete steps in that direction and then move over to talking about what we are going to do about the exports of this country and then also on the home buyers,” says FM.

After several months of silence over the country’s receding economy, it is only now that FM Sitharaman has addressed the concerning state. She has been meeting representatives of slowdown-hit industries like automobile, FMCG (Fast-Moving Consumer Goods) etc. to understand their demands.

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Key Announcements by FM Nirmala Sitharaman:

  • “There is an increased and improved flow of credit from banks. Partial credit guarantee scheme gas benefitted 7 NBFCs so far.”
  • Inflation is under control and there is a clear sign of revival of Industrial production.
  • FM announces relaxation for small taxpayers as the defaulters below the limit of Rs 25 lakh will not be prosecuted.
  • A massive-scale incentive scheme worth Rs 50,000 Cr announced on Export incentive.
  • A slew of measures announced by the FM in order to facilitate the exports sector. The Scheme for Remission of Duties or taxes on the export product will replace MEiS. Both will continue till December 2019. Starting January 1, 2020, MEiS will cease to exist. In addition to this, a fully electronic refund module for a quick and automated refund for ITC nearing completion will be implemented by September end 2019.
  • “Export Credit Guarantee Corp will expand the scope of ECIS and offer higher insurance cover to banks lending working capital for exports in a move which will cost Rs 1700 crores per annum to the government,” Sitharaman says.
  • Annual mega shopping festivals will be organised in four cities across March 2020 in India based on themes (Gems and Jewelry, Handicrafts and Yoga / Tourism, Textiles and Leather).
  • Major announcement regarding Free Trade Agreements: An FTA Utilisation Mission headed by a senior officer in Dept of Commerce will be set up to work with Federation of Indian Export Organisations (FIEO) and export houses to utilise concessional tariffs in each FTA.

  • Mass enrolment of artisans across India for handicraft promotion to boost the handicraft sector to harness e-commerce for exports.

  • Affordable Housing on FM’s Agenda: Additional deduction of Rs 1.5 Lakh for interest paid on loans borrowed up to 31 March 2020 for purchase of house valued up to Rs 45 Lakh.
  • Reduced EMIs for housing loans and more credit support for the purchase of houses, vehicles and consumer goods. Special window for affordable and middle-income housing.

  • “Projects that are 60% complete shall get last mine funding through a special window. We will not interfere with the projects that are under National Company Law Tribunal (NCLT). The tribunal will decide what has to be done. About 3.5 lakh dwelling units to benefit from this,” FM says.
  • Rs 10,000 fund size to be contributed by the Government of India and nearly the same size of fund amount from outside investors to boost the housing sector.

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Inflation is under control and there is a clear sign of revival of Industrial production.

The Narendra Modi led government recently announced a mega PSU bank merger with a focus to create national banks with a global presence. The FM also announced in the pressers held in the last week that apart from being aware of the economic slump, the government has also promised a slew of measure for GDP growth recovery. These measures encompass an upfront release of Rs 70,000 crore to public sector banks, measures to remedy the slowdown in the auto sector, improve taxes compliance and help MSMEs and India Inc.

In lieu of the sagging economic growth, the Moody’s Investors Service on Friday cut India’s GDP growth forecast for 2019 calendar year to 6.2 per cent from the previous estimation of 6.8 per cent. For 2020 calendar year, it reduced the estimate by a similar measure to 6.7 per cent.