The high-level panel, established by the Commerce and Industry Ministry, has proposed several strategies for increasing India’s exports of goods and services to over USD 1,000 billion by 2025. The group was led by Surjit Bhalla, an economist. The main recommendation was the issuance of ‘Elephant Bonds,’ where those declaring unreported income would be required to compulsorily invest half of that amount in these securities.
‘Elephant Bonds’ as a Tool for Investment
The term “Elephant Bond” refers to a 25-year sovereign bond in which people disclosing undisclosed income are obligated to invest 50 per cent. The fund acquired from these bonds would be employed exclusively for infrastructure projects.
Tax Reformation Proposals
The committee has suggested lowering the effective corporate tax rate and reducing the cost of capital. They have also proposed simplifying the regulatory and tax framework for attracting foreign investment funds.
Increasing Capital Base of EXIM Bank
The panel recommends expanding the capital base of EXIM Bank by another Rs 20,000 crore by 2022. This would provide the bank with more resources for facilitating trade.
Strategic Approach towards Free Trade Agreements
The report advises seeking input from industries and MSMEs before entering into free trade agreements (FTAs) and educating them about its benefits. It emphasises the necessity for a thorough evaluation of existing agreements and their impact on the competitiveness of India’s industry sector.
| Recommendation | Benefit |
|---|---|
| ‘Elephant Bonds’ | Attract investment for infrastructure |
| Lower tax rates | Attract foreign investment funds |
| Increase EXIM Bank capital base | Facilitate trade |
| Strategic FTAs | Benefit industry and MSMEs |
WTO Consistent Support Measures
The panel stressed that state governments should be actively engaged in enhancing the competitiveness of exports by offering support measures in a WTO (World Trade Organisation) consistent manner.
Rationalisation of Tariff Structure
The committee suggested constructing a comprehensive export strategy and rationalising the tariff structure, focusing on creating an environment favourable for export growth.
Industry-Specific Suggestions
In addition, they advised modification in labour laws to boost sectors like textiles and garments. For promoting medical tourism, they recommended setting up a pan-India tourism board and simplifying the medical visa regime. Furthermore, the abolishment of the Essential Commodities Act and the APMC (Agricultural Produce Market Committee) were proposed to encourage agricultural exports.
Promoting exports is beneficial for any country as it creates job opportunities, boosts manufacturing, and increases the earning of foreign exchange. India, with its diverse industry base and services sector, can significantly benefit from these proposals if implemented effectively.
