The Finance Minister Nirmala Sitaraman has announced a slew of initiatives to reverse the economic slowdown that the country is facing.
- Industrialists and economists have flagged the status of the economy in the recent past and urged the government to take responsive steps.
- In order to boost the growth and curtail the downturn of the economy the Finance Minster has announced the following measures.
Crediting Wealth Creators
- The government has withdrawn the controversial surcharge on FPIs (Foreign Portfolio Investments) that has spooked foreign investors from investing in the country. That is the surcharged levied on the long-term and short-term capital gains as per the Finance (No 2) Act, 2019 will not apply now. The move is expected to boost investments from the FPIs. However, the surcharge that was announced in the budget on High Net-worth Individuals earning more than Rs. 2 crore a year will apply.
- Now, Corporate Social Responsibility (CSR) violations will not be treated as criminal offences. Earlier, CSR violations attracted a jail term of three years.
- The government will immediately infuse Rs. 70000 crore into the banking sector to boost liquidity. This will facilitate more credit disbursals by the banks and they have also agreed to pass on RBI rate cuts to the customers.
- To ease the pain of the borrowers, the Minister has announced that the PSBs are now mandated to return the loan documents within 15 days of the closure of the loan and customers can check their loan status online.
- The Minister has announced a Rs. 20000 crore funding boost to the Housing Finance Boards there by giving a cheer to the home buyers.
- Another important move is to repay the pending GST refunds to the MSMEs within the next 30 days and in the future the refunding process will complete in 60 days of filing.
Reviving The Auto Sector
- To bail-out the auto industry the Finance Minister has announced that the government will now allow all its departments to replace old vehicles and buy new ones. also, vehicles that have been bought till March 30, 2020 will be eligible for 15% depreciation.
- Registration fees enhancement has been put on hold till June 2020.
- The moves are expected to boost auto sales.
- The current economic slowdown has hit the automobile industry hard with many companies laying off employees to cut their losses.
Reinging In Taxmen
- In order to make tax scrutiny transparent, the government has announced that a centralised computer system will issue tax notices that would carry a unique code called Document Identification Number (DIN) from October 1. Any notice that do not carry the code will become invalid. This will end the discretionary powers of the tax authorities in issuing notices.
- To finance infrastructure projects, the government is looking to set up development financial institution (DFI). It will provide long-term finance to large scale infrastructure projects.
Angel Tax Removed
- The government has removed the Angel Tax on registered Start-ups that has been a major concern for start-ups and their investors in the country. With the move, the tax burden on the start-ups is reduced and the money can be put to productive use.
- Also, the government has announced to set up a dedicated cell in the office of Central Board of Direct Taxes to address issues related to income tax of Start-ups.
- NBFCs are allowed to use Aadhar-linked Know Your Customer (KYC) details of banks to disburse loans instead of doing KYC loans all again by themselves.
The move by the government came at the right time and is expected to the boost growth.