Finance Minister Nirmala Sitharaman held a press conference in Delhi on Friday. (PTI Photo)
Asserting that reform is on top of the Narendra Modi-led central government’s agenda, Finance Minister Nirmala Sitharaman Friday announced a slew of measures in an attempt to give a fillip to the economy.
Among the key measures that were announced include relief from the enhanced surcharge on Long term/Short term Capital Gains, CSR violations not to be treated as a criminal offence, and the withdrawal of Angel tax provisions for startups and their investors. Sitharaman also announced that the government has rolled back enhanced surcharge on foreign portfolio investors (FPIs), restoring pre-budget position. With an aim to end harassment of taxpayers, the Finance Minister also announced that all tax notices will be issued from a centralised system. She said banks will make home and auto loans cheaper.
On Thursday, Niti Aayog Vice Chairman Rajiv Kumar had said that since the government is faced with an “unprecedented issue”, it needs to take up steps which are “out of the ordinary.”
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"This is an unprecedented issue for the government of India," Rajiv Kumar said. (Express Photo/File)
Thank you for following our LIVE blog. We'll be back next week as Finance Minister Nirmala Sitharaman will announce another set of fresh measures.
As the Finance Ministry announced a bouquet of measures to give a fillip to the economy, Nirmala Sitharaman Friday said banks will launch repo rate and external benchmark-linked loan products that will lead to reduced easy monthly installments for housing, vehicle and other retail loans. Read more
In a press conference Friday, the Ministry of Finance reviewed its earlier decision to treat CSR violations as criminal offences saying it would now be a civil liability. Finance Minister Nirmala Sitharaman said the Ministry of Corporate Affairs will review the sections under the Companies Act and will provide time to the companies for completing ongoing projects towards fulfilling their CSR obligations. Read more
Key announcements from Finance Minister Nirmala Sitharaman's press conference
1. On tax reforms - All tax notices will be issued from a centralised system. All old tax notices will be taken up by October 1 or will be uploaded again through a centralised system.
2. Surcharge levied on Foreign Portfolio Investment(FPI) and domestic investors rolled back
3. The government will infuse upfront Rs 70,000 crore into public sector banks to enable them of releasing Rs 5 lakh crore liquidity in the market. Banks will also launch a repo rate or external benchmark-linked loan products.
4. Banks will make home loans and auto loans cheaper.
5. BS-IV vehicles purchased till March 2020 will remain operational for the entire period of registration. Both electric vehicles and liquid fuel-driven vehicles will continue to be registered.
6. Any vehicle acquired from now till March 2020 will benefit from an additional 15 per cent depreciation, making a total of 30 per cent depreciation.
7. Withdrawal of super-rich surcharge on FPIs, the domestic investor will be for the entire fiscal year
8. Two more sets of new announcements to come up in the near future, one in the coming week.
"The enhance surcharge on domestic investors as well as FPIs have been rolled back. It will be applicable to this fiscal year," says Revenue Secretary.
"One more set of the announcement will come next week. Soon after that, one another more set of the announcement will be made. These will take care of the other issues being faced," says FM Sitharaman
"Any vehicle acquired from now till March 2020 will benefit from an additional 15 per cent depreciation, making a total of 30 per cent depreciation," says Nirmala Sitharaman
"Inter-Ministerial Task Force is being formed by DEA to finalise pipeline through which various infra projects will get funded; projects to be monitored actively to accelerate capital expenditure and investment in the economy," says Finance Minister Nirmala Sitharaman
"In order to improve market access for domestic retail investors, Aadhaar-based KYC will be necessary to open Demat account," says Finance Minister Nirmala Sitharaman
Sitharaman on deepening of bond markets
"All pending GST refunds due to MSMEs till now shall be paid within 30 days. Everything which is pending from the time of introduction of GST will be sorted out within 30 days from today. Every refund for future GST matters will be solved within 60 days. Within 60 days, the refund for MSMEs will be done," says FM Nirmala Sitharaman
Several measures taken for borrowers and bankers
Measures related to Banks and MSMEs
Public sector banks shall ensure mandated return of loan documents within 15 days of loan closure. Within 15 days, the documents shall be returned to the customer: FM Sitharaman
"In order to encourage investment in capital market, it is decided to withdraw enhance surcharge levied by the Finance No. 2 Act 2019. In simple words, the enhance surcharge on FPI goes, surcharge on domestic investors in equity goes. Pre-budget position is restored," says Nirmala Sitharaman
"To mitigate genuine difficulties of start-ups and investors, it has been decided Section 52 B of Income Tax Act shall not be replicable to the start-up registered with DPIIT. The Section continues but will not be applicable to registered start-ups," says Finance Minister Nirmala Sitharaman.
"CSR violations are not to be treated as a criminal offence, will instead be civil liability. No intention of the government to go on prosecution route": Nirmala Sitharaman
"In labour laws, fixed-term employment is being facilitated. Web-based jurisdiction is being done for a free inspection. Inspection has to be uploaded within 48 hours. Compounding of offences will be a priority," says Finance Minister Nirmala Sitharaman
"This govt, even from 2014, has kept reform at top of agenda. It is an ongoing process. Reform is a continuous process. Whether it is self-certification or environment clearance, we have not lost that momentum. About labour, taxation reforms, we have kept that momentum," says Nirmala Sitharaman
The current projected global GDP growth is about 3.2 per cent. Moreover, not just one, many organisations have come out to say that global demand is weak: Finance Minister Nirmala Sitharaman
RBI Governor Shaktikanta Das Wednesday said that the Indian economy was showing a further weakening on its part and needed a larger push to revive. According to the minutes of the Monetary Policy Committee (MPC) meeting, which was held on August 7, Das said in view of weakening of domestic growth impulses and unsettled global macroeconomic environment, there is a need to bolster dwindling domestic demand and support investment activity, even as the impact of past three rate cuts is gradually working its way to the real economy. Read more
Moody's Investors Service on Friday cut India's GDP growth forecast for 2019 calendar year to 6.2 per cent from the previous estimation of 6.8 per cent. For 2020 calendar year, it reduced the estimate by a similar measure to 6.7 per cent. In a statement, it said the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment. (PTI)
Asking the government to remonetise the economy, Congress leader Rahul Gandhi Friday said "India's economy is in a deep mess" and asked the government to "return the money to the needy and not the greedy." He tweeted, "Govt’s own economic advisors have finally acknowledged what we cautioned for long – India’s economy is in a deep mess. Now, accept our solution and remonetise the economy, by putting money back in the hands of the needy & not the greedy." Read more
Niti Aayog Vice Chairman Rajiv Kumar Thursday said that the government needed to take stringent steps to come out of the "unprecedented situation." He also pointed out the lack of trust in the market and said that it is not just about the trust between the government and the private sector, but "within the private sector as nobody wants to lend to anybody else." Read more
As Nirmala Sitharaman took charge of the Finance Ministry on May 31, GDP data released hours ago before her taking over showed that the country's GDP growth rate for January-March 2019 had slipped to 5.8 per cent as compared to 8.1 per cent in the corresponding months last year. However, the rate was lower than this at 5.3 per cent in the last quarter of UPA II or January-March 2013-14. Read more