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Promoting export, housing sector are among fresh measures to boost economy

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6 years ago

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Union finance minister Nirmala Sitharaman today – Saturday, Sep 14 – announced a slew of measures to boost the economy, focusing mainly around steps to promote exports and the housing sector.

Informing the media about the third part of the stimulus package for the economy, the finance minister said that the industrial production and fixed investment have shown signs of revival. Sitharaman also said that CPI or retail inflation has been kept under 4 per cent, adding that several NBFCs are benefiting from partial credit guarantee schemes announced earlier.

Exports

For incentivising exports, finance minister Sitharaman announced a new scheme — Remission of Duties or Taxes on Export Product (RoDTEP) – estimated to cost Rs 50,000 crore to the exchequer.

She said RoDTEP will replace the existing incentive schemes and “will more than adequately incentivise exporters than the existing schemes put together”. The minister said the revenue foregone towards the scheme is projected at Rs 50,000 crore.

The announcement comes in the backdrop of India’s merchandise exports declining by 6.05 per cent to $26.13 billion in August compared to the year-ago month.

The minister also said there will be a fully automated electronic refund route for input tax credits (ITC) in GST. This will be implemented by the month-end. The move, she added, is aimed at quick and automated refunds of ITC.

She also announced other steps including simplification of GST rules to higher insurance cover to banks lending for exports. Announcing easier rules for lending to priority sectors, Nirmala Sitharaman said the measures could lead to export credit rising by Rs. 36000 crore to Rs. 68,000 crore.

“The measures have been periodically formulated based on the inputs that we obtained during nationwide consultations that we are doing,” said the Finance Minister. The steps to promote exports come at a time the government intends to more than triple the country’s annual exports to $1 trillion in the next five years.

“Each time we are making a clear attempt to also connect with the previous announcements,” the Finance Minister said, as she explained the measures through a presentation. The government had earlier announced steps such as a withdrawal of higher taxes on foreign investors – as announced in the Budget – and a mega merger plan for 10 state-run banks in a bid to push investments and growth.

The premium incidence for the Ministry of Micro, Small and Medium Enterprises (MSMEs) will be moderated suitably, she said.

Sectors such as textiles which enjoy incentives up to 2 per cent under the Merchandise Exports from India Scheme will transit into the RoDTEP scheme from January 1, the Finance Minister said.

Sitharaman said India would launch four mega shopping festivals like the ones organised in Dubai. These shopping festivals would be held at four locations across the country.

These festivals would be held on specific themes such as gems and jewellery, yoga, tourism and textiles and leather. The first of these festivals would be held in March 2020.

The Gulf emirate organises several events such as the Dubai Food Festival and the month-long Dubai Shopping Festival. The shopping festival has been on for a little more than two decades and had been originally launched to increase Dubai’s retail trade. It was later promoted as a tourist attraction.

Official data this week showed the country’s exports dropped 6.05 per cent to $26.13 billion last month. Still, India’s trade deficit narrowed to $13.45 billion in August from $17.92 billion in the corresponding period a year ago thanks to a 13.45 per cent fall in imports to $39.58 billion.

On Thursday, Commerce Minister Piyush Goyal had said that the ongoing trade disputes between the US and China offer a window of opportunity for domestic manufacturers to make a mark in export markets.

Housing

For housing sector, the finance minister announced a Rs. 10,000-crore special window to provide last-mile funding for completion of ongoing housing projects which are not NPAs or facing bankruptcy proceedings under NCLT. Sitharaman said while the government will contribute Rs 10,000 crore for the special window, roughly the same amount is expected from outside investors.

This window will help in completion of affordable and middle income housing projects. The fund will be managed by professionals, the minister said.

“The objective is to focus on construction of unfinished units,” she said. “This will benefit roughly 3.5 lakh projects across the country,” the finance minister added.

 

Sitharaman also said the interest rate on housing building advance will be lowered and linked to the 10-year G-sec yields.

The government of India on the lines of the National Investment and Infrastructure Fund may contribute to the Rs 10,000 crore fund for the special window. Rest of the funds will be from LIC and other institutions and private capital from banks/sovereign funds etc.

Among other announcements, Sitharaman also relaxed guidelines of External Commercial Borrowings to facilitate financing of home buyers. This will be done in consultation with the Reserve Bank of India which will help identify eligible beneficiaries under the Pradhan Mantri Awas Yojna (PMAY).

In addition, the interest rate on House Building Advance shall also be lowered and linked with the 10 year G Sec Yields.

“Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses,” the finance minister said.

The economic growth hit a six-year low of 5 per cent for the first quarter of the current fiscal.

Over the past weeks, the government has announced a slew of economic measures including the mega bank mergers, withdrawal of higher surcharge on foreign portfolio investments (FPIs) and domestic investors, sops for infrastructure, revival package for the auto industry and relief for startups.

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Video of Bill Gates enjoying Vada Pav with Sachin Tendulkar during Mumbai visit goes viral

Gates, currently touring India, has been making waves with high-profile engagements. Earlier this week, he touched down in New Delhi, where he held discussions with Prime Minister Narendra Modi and several Union ministers.

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1 week ago

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March 21, 2025

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Microsoft co-founder and philanthropist Bill Gates delighted his followers by posting an Instagram video featuring Indian cricket icon Sachin Tendulkar, with the playful caption, “A snack break before we get to work.” The brief clip captures the duo relishing Mumbai’s beloved street food, vada pav, whilst perched on a bench, ending with a teasing “Serving soon” message splashed across the screen.

Gates, currently touring India, has been making waves with high-profile engagements. Earlier this week, he touched down in New Delhi, where he held discussions with Prime Minister Narendra Modi and several Union ministers. His itinerary then brought him to Mumbai, where he met Maharashtra Chief Minister Devendra Fadnavis. The tech titan’s visit underscores his ongoing fascination with India’s innovative spirit, a theme he expanded upon in a recent blog post.

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Writing on his personal site, Gates reflected on the trip’s impact: “I came away with fresh perspectives because India is brimming with clever, driven individuals addressing some of the globe’s toughest challenges in ingenious ways.” His words echo sentiments he shared ahead of the visit, when he praised Odisha’s farmers for leveraging artificial intelligence to boost agricultural outcomes—a story that’s garnered attention for its blend of tradition and technology.

The vada pav moment with Tendulkar, a national treasure, adds a light-hearted touch to Gates’s packed schedule. It’s not just a snack break; it hints at a potential collaboration, though details remain under wraps. For Indian fans, seeing two legends—one from tech, the other from cricket—share a casual bite is a rare treat, blending global influence with local flavour.

As Gates continues his journey, his interactions spotlight India’s dual role as a hub of innovation and a cultural powerhouse. Whether it’s AI-driven farming or a street-side snack with a sporting hero, his visit is proving to be a feast of ideas—and vada pav.

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Manappuram Finance shares hit record high after Bain Capital announces $508 million stake deal

Shares of Manappuram Finance surged to an all-time high after Bain Capital announced plans to acquire an 18% stake in the gold loan provider.

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1 week ago

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March 21, 2025

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Manappuram Finance shares rise after Bain Capital deal

India’s gold loan provider Manappuram Finance saw its shares soar to an all-time high on Friday after Bain Capital revealed plans to invest $508 million for an 18% stake in the company. The move, analysts say, brings clarity to Manappuram’s management succession strategy and paves the way for stronger strategic control.

Bain Capital, a U.S.-based private equity firm, will subscribe to Manappuram’s shares and warrants at Rs 236 per share — a 9% premium over Thursday’s closing price of Rs 217.5. Following the transaction, Bain will jointly control the company along with other key stakeholders, referred to as ‘promoters’ under Indian regulations.

As of 12:05 p.m. IST on Friday, Manappuram’s shares surged by as much as 6.3% to Rs 231.08, marking their highest level on record.

Founder to step back as Bain gains influence

Founder and CEO V.P. Nandakumar, who has led the company for nearly four decades, will transition to the role of non-executive chairman once the investment is finalized. With Bain Capital now having rights to influence strategic decisions and appoint key roles including the CEO, analysts at Jefferies and CLSA have responded positively.

CLSA noted that the potential for re-rating of Manappuram’s stock is strong as new leadership takes over. Jefferies and CLSA have both raised their target prices by 14.6% and 20%, respectively, maintaining bullish ratings of “buy” and “outperform.”

Deal to boost gold loan business, offset microfinance losses

The deal is expected to close in the upcoming financial year and is likely to accelerate growth in the company’s gold loan segment, which currently contributes around 75% of its total revenue. With gold prices at historic highs, the demand for gold-backed loans remains robust.

Additionally, analysts expect part of the capital raised through the deal may be used to cushion the losses in Manappuram’s microfinance division. The company confirmed that Asirvad Micro Finance, its microfinance subsidiary, will withdraw its IPO draft filing amid changing market conditions and regulatory scrutiny.

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Alphabet’s $32 billion acquisition of Wiz marks biggest cybersecurity push

Alphabet has announced a $32 billion deal to acquire Wiz, reinforcing its cloud security offerings as it competes with AWS and Microsoft Azure.

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1 week ago

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March 19, 2025

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Alphabet to acquire Wiz for $32 billion to boost cloud security

Alphabet, the parent company of Google, has announced its largest acquisition to date with a $32 billion deal to buy cybersecurity startup Wiz. The move signals Alphabet’s aggressive expansion in cloud security as it competes with Amazon Web Services and Microsoft Azure in the cloud computing market.

A strategic investment in cybersecurity

The acquisition will integrate Wiz into Google Cloud, reinforcing its security capabilities to help businesses mitigate cyber risks. The deal, which follows Alphabet’s previously unsuccessful $23 billion bid, underscores the company’s commitment to securing a stronger foothold in the cloud security space.

Wiz, an Israel-based firm, provides security solutions that work across major cloud providers, including Amazon Web Services, Microsoft Azure, and Google Cloud. The company has gained significant traction, boasting clients such as Morgan Stanley, BMW, and LVMH.

Regulatory scrutiny and financial impact

Despite the high price tag, Alphabet appears confident in securing regulatory approval under the new U.S. administration, which has maintained a watchful eye on major tech mergers. Notably, the termination fee—over $3.2 billion—stands among the highest in M&A history, signaling both parties’ commitment to closing the deal.

Alphabet’s stock dipped nearly 3% following the announcement, reflecting investor concerns over its heavy spending, particularly in AI and cloud computing. The company may need external financing, given its cash reserves of approximately $23.47 billion as of December 31, 2024.

Growing importance of cybersecurity

The acquisition highlights the increasing demand for cybersecurity solutions, especially in light of last year’s global CrowdStrike outage that disrupted businesses worldwide. Analysts suggest that for Google Cloud to compete effectively with Microsoft Azure, it must offer a more comprehensive suite of security services.

Alphabet expects the deal to be finalized in 2026, pending regulatory approvals. Meanwhile, Wiz will continue providing its services across multiple cloud platforms, potentially alleviating antitrust concerns.

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