News:Government has announced a set of measures aimed at two sectors of the economy namely exports and housing sector.These measures are aimed to reverse a deepening economic slowdown.
Facts:
Special Fund for Housing Projects:
- A special fund will be set up for providing last-mile funding for housing projects.It will focus on the construction of unfinished housing projects.
- The fund will be available for affordable and middle income projects that does not belong to NPA category (Non-Performing Assets) and is not undergoing National Company Law Tribunal proceedings.
- The fund will be created on the lines of the National Investment and Infrastructure Fund(NIIF).
- The fund will source contributions from the government, LIC and other institutions, private capital from banks, sovereign funds among others.
- The government’s contribution to the fund would be ₹10,000 crore and the other investors would contribute roughly the same amount.
Reforms in the Exports Sector:
- A new scheme called Remission of Duties or Taxes on Export Product (RODTEP) has been introduced.It will replace the existing Merchandise Exports from India Scheme (MEIS).
- MEIS which provides incentive in the form of duty credit scrip to the exporters to compensate for loss on payment of duties will be phased out since it is not compliant with World Trade Organization(WTO) norms.
- Under the Remission of Duties or Taxes on Export Product (RODTEP) scheme,the government will remit all taxes and duties paid by exporters. All sectors including textiles will migrate into RODTEP from January 1, 2020.
- An electronic refund module will also be set up for the quick and automated refund of input tax credits to the exporters.
- The Export Credit Guarantee Corporation(ECGC) will expand the scope of ECIS (Export Credit Insurance Service) and will offer higher insurance cover to banks lending working capital for exports.
Additional information:
Input tax Credit:
- Input tax credit is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.
- In other words,businesses can reduce their tax liability by claiming credit to the extent of Goods and Services tax(GST) paid on purchases.
Export Credit Guarantee Corporation(ECGC):
- ECGC is a premier export credit agency of the Government of India to provide Export Credit Insurance Services to facilitate exports from the country.It was founded in 1957.It is headquartered at Mumbai.
- The ECGC offers credit insurance schemes to exporters to protect them against losses due to non-payment of export dues by overseas buyers due to political or commercial risks.
National Investment and infrastructure fund(NIIF):
- NIIF was set up in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects in the infrastructure sector.
- NIIF invests in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
