By DK Aggarwal
In another development, the government has unveiled Rs 8,450-crore package to revive exports and export.
This is a strategic part of the economic policy, after the introduction of GST in the month of July, with the promise of rolling out e-wallet facility for refunds, giving the much-needed respite to exporters from working capital blockage.
The incentives announced were as part of the mid-term review of the Foreign Trade Policy. Also the statement from the Foreign Trade Policy (FTP) that it would continue to review and evaluate regularly for addressing concerns of the exporters, simplification of procedures and for promotion of exports, indicates that government would further take more steps to boost exports.
FTP has set an ambitious target of $900 billion for India’s exports of goods and services by 2019-20. Besides the incentives, the government has also come out with foreign trade facilitation measures to improve competitiveness of India's exporters including duty-free imports for exports on self-certification and validity for duty credit scripts has been increased to 24 months.
The announcement of incentives worth Rs 8,450 crore by the government will not only boost exports of goods and services, but also increase employment generation and value-addition.
This development has come at a time when India’s shipments shrank in the month of October for the first time after 14 consecutive months of positive growth due to the impact of the Goods and Services Tax (GST).
Actually exporters have been grappling with working capital issues with reportedly huge refunds on the newly-launched indirect levy GST stuck with the government.
Meanwhile, in order to develop and co-ordinate integrated development of the logistics sector, a new logistics division has been institutionalised the Department of Commerce. This is likely to improve India's ranking in the Logistics Performance Index (LPI) and promote exports and enhanced growth in the economy.
Incentives under the Merchandise Export from India Scheme (MEIS) have been raised to 4 per cent to 2% per cent for leather, textiles, agriculture products and carpets.
This development is likely to give a major boost to the government’s flagship programmes such as “Make in India”. If news is to be believed the government is also mulling a new approach that institutionalises the combined strengths of its ‘Make in India’ and ‘Invest India’ initiatives. As these altogether would streamline them for attracting more investments, including from overseas, in the manufacturing sector.
(The author is Chairman and MD, SMC Investments and Advisors Ltd. Views and recommendations given in this section are his own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned)
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