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In third set of stimulus measures, FM Sitharaman unveils Rs 70,000 cr package for exports, real estate sectors

Union Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur during the press conference in New Delhi.(Express photo: Tashi Tobgyal)

Announcing the third tranche of steps to give a fillip to the slowing economy, Union Finance Minister Nirmala Sitharaman’s presser laid emphasis on real estates and exports sectors. With the government battling to pull the economy out of a six-year low growth rate, Sitharaman announced an over Rs 70,000 crore stimulus package.

Stating that the inflation is under control and has been kept "very much" below 4 per cent, the Finance Minister said there is a clear sign of revival of industrial production. "Inflation is being held between 3 and 6 per cent, but we are keeping it at 4 per cent. 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.

Sitharaman’s key announcements

Sops to boost housing

A Rs 10,000 crore special window to provide last-mile funding for completion of ongoing housing projects was also announced by the Finance Minister. The projects include those which are not NPA’s or facing bankruptcy proceeding under the National Company Law Tribunal (NCLT). The objective of the special window is to focus on the completion of affordable and middle-income housing projects. The government will contribute Rs 10,000 crore for the special window and the same amount is expected from outside investors such as LIC and other institutions and private capital from banks, sovereign funds and FDIs.

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Sitharaman also said the interest rate on housing building advance will be lowered. "Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses," she said. The government also announced that the External commercial borrowing (ECB) guidelines will be relaxed to help housing developers obtain overseas funds.

Read | Congress calls Sitharaman s steps to boost economy cosmetic

The guidelines will be relaxed to facilitate the financing of homebuyers who are eligible under Pradhan Mantri Awas Yojna, in consultation with the central bank. Sitharaman further said she will be meeting bankers on September 19 to discuss on status of measures announced to increase liquidity measures for HFCs, and repo-linked lending rates, development on guarantee schemes.

‘Rs 50,000 cr export incentive scheme’

In order to incentivise exporters in the country, Sitharaman announced a new scheme– Remission of Duties or Taxes on Export Product (RoDTEP). She said RoDTEP will replace the existing incentive schemes and "will more than adequately incentivise exporters than the existing schemes put together". The RoDTEP scheme comes at an estimated cost of Rs 50,000 crore to the exchequer.

Explained | Decoding Sitharaman s first set of measures to revive economic growth

Sitharaman also announced revised priority sector lending (PSL) norms for exporters which will release an additional funding of Rs 36,000 crore to Rs 68,000 crore to them. (Express photo: Tashi Tobgyal)

The announcement by the Finance Minister comes in the backdrop of India’s merchandise exports declining by 6.05 per cent to USD 26.13 billion in August from the same month in 2018.

Nirmala Sitharaman presser Highlights: Rs 10,000 cr funding for completion of affordable housing projects

The minister also said there will be a fully automated electronic refund route for input tax credits (ITC) in GST. The move is aimed at quick and automated refunds of ITC and will likely be implemented by the end of September. In addition, she announced revised priority sector lending (PSL) norms for exporters which will release an additional funding of Rs 36,000 crore to Rs 68,000 crore to them.

PSL norms for export credit have been examined and enabling guidelines are under consideration of the Reserve Bank of India, she said.

Sitharaman added that a mega shopping festival on the likes of the world-famous Dubai Shopping festival, will be conducted at four places in India in March on themes of gems and jewellery, handicraft/yoga/tourism, textiles and leather.