The government on Friday approved a proposal for the construction of 780 km of green highways at a cost of Rs 7,660 crore and a scheme for reimbursement of taxes and duties to exporters.
"The Cabinet has approved building 780-km 'green' National Highway project at a cost of Rs 7,660 crore," union minister Prakash Javadekar told reporters after the meeting.
The project pertains to rehabilitation and upgradation of various National Highways covering a total length of over 780 km in four states -- Himachal Pradesh, Rajasthan, Uttar Pradesh and Andhra Pradesh.
With a view to give a boost to the country's dwindling outbound shipments, the government approved a scheme for reimbursement of taxes and duties to exporters. A decision in this regard was taken in a cabinet meeting chaired by Prime Minister Narendra Modi here.
The reimbursement of taxes such as duty on power charges, VAT on fuel in transportation, farm sector, captive power generation, mandi tax, stamp duty and central excise duty on fuel used in transportation would make Indian products competitive in global markets, the commerce and industry ministry tweeted.
The measures are compliant with WTO norms, it mentioned. The sectors and products under the remission of duties and taxes on export products (RoDTEP) will be notified in a phased manner and the MEIS benefit for those sectors and items will be withdrawn. Finance minister Nirmala Sitharaman had announced RoDTEP scheme in her Budget speech on February 1.
Briefing the media about this decision, commerce minister Piyush Goyal on Friday said with the rolling out of this new scheme, the Merchandise Export Incentive Scheme (MEIS) will be "phased out".
Sitharaman had said the scheme will be launched this year itself. The scheme is to incentivise exporters at an estimated cost of Rs 50,000 crore to the exchequer.
It is proposed to digitally refund to exporters, duties and taxes levied at the centre, state, and local levels, Sitharaman had said while presenting the Union Budget for 2020-21.
These taxes include value-added tax (VAT), electricity duties and the fuel used for transportation, which are not exempt or refunded under any other existing mechanism. The move assumes significance as a WTO dispute resolution panel has ruled that MEIS was not in compliance with global trade rules.
Under the World Trade Organisation (WTO) rules, certain duties like state taxes on power, oil, water, and education cess are allowed to be refunded. The country's exports contracted for the sixth month in a row by 1.66 percent in January to $25.97 billion.
During April-January 2019-20, exports slipped 1.93 percent to $265.26 billion, while imports declined 8.12 percent to $398.53 billion, leaving a trade deficit of $133.27 billion.
Also, union finance minister Nirmala Sitharaman said the government and the Reserve Bank are closely monitoring the stock market, which is facing intense volatility amid mounting coronavirus fears.
Together with the RBI, the government is closely monitoring markets, she said on the situation arising out of a panic spread of coronavirus pandemic.
After being battered in the early session, the BSE Sensex spurted 1,325.34 points and the NSE Nifty rose 365.05 points to settle the day at 9,955.20.
Indian market saw its biggest intra-day selloff in the early session, wiping nearly Rs 12 lakh crore off investor wealth in less than 20 minutes of opening trade.
As coronavirus-led recession fears triggered panic selling globally, both Sensex and Nifty plunged over 10 per cent in the opening session, hitting their lower circuit levels.Stock exchanges halted trading for 45 minutes. Normal trading resumed at around 1030 hours. The last circuit freeze happened in January 2008.