GS 3: Economy

Why in News?

The high-level panel constituted by Commerce and Industry Ministry has recommended a host of measures for doubling India’s exports of goods and services to over USD 1,000 billion by 2025. The panel was headed by economist Surjit Bhalla.

The panel recommendations:

• It has suggested issuance of ‘Elephant Bonds’ wherein people declaring undisclosed income will have to mandatorily invest half of that amount in these securities.
• Lowering effective corporate tax rate, bringing down cost of capital and simplifying regulatory and tax framework for foreign investment funds.
• Increasing capital base of EXIM Bank by another Rs 20,000 crore by 2022.
• Seeking inputs from industry and MSMEs before signing free trade agreements (FTAs) and sensitising them of its benefits.
• State governments need to be closely involved in improving the competitiveness of exports by providing support measures in a WTO (World Trade Organisation) consistent manner.
• Building a comprehensive export strategy and rationalise tariff structure.

Industry-specific suggestion are:

• Textiles and garments sector: modification in labour laws (like the Industrial Disputes Act, 1947) to remove the limitation on firm size and allow manufacturing firms to grow.
• Medical tourism: Setting up of a pan-India tourism board to promote medical value tourism. Simplification in the medical visa regime.
• Agriculture exports: abolishing Essential Commodities Act and the APMC (Agricultural Produce Market Committee) to promote agricultural export.
• Medical sector: a single ministry for medical devices and separate regulation for this sector.

Elephant Bonds:

• It is a 25-year sovereign bond in which people declaring undisclosed income will be bound to invest 50 per cent.
• The fund will be utilised only for infrastructure projects.