GROWTH MEASURES FOR INDIAN ECONOMY
What’s in news?
On the front foot to try to boost private sector, the Finance Minister came up with few measures to reduce the burden facing by the private sector.
- Finance Minister Nirmala Sitharaman started her speech on Friday by touching on the current global headwinds that are affecting India’s economy as well.
- Global GDP growth may be revised downwards from current estimate of 3.2% and global demand going to be weak. As a result of US-China trade war and currency devaluation, very volatile situation has developed in global trade.
- However, India’s growth rate is higher in comparison with many countries.
- The following initiatives are expected to boost growth and lead to job creation.
- Earlier government mentioned that violation of Corporate Social Responsibility (CSR) will be considered as a criminal offence with jail term of up to three years along with fine.
- But now the Finance Minister made it clear that the government will not treat such violations as a civil matter not as criminal matter.
- The surcharge levied by the Finance Act (No 2) Act 2019 on long- and short-term capital gains arising from the transfer of equity shares will be withdrawn to encourage investment in the capital market.
- It is to be noted that, in the recent budget, the surcharge was increased for the individuals earning more than ₹2 crore a year.
- Such decision would be reviewed after our Country’s 75th Independence Day.
- In order to relief the auto industry from existing downward sales problem, the FM came up with few measures to increase its sale.
- The government had rescinded its ban on the purchase of new vehicles by its departments to replace old ones to mitigate distress in auto sector.
- Vehicles bought till March 31, 2020 will also be eligible for an additional 15% depreciation which is raised to 30% to ease building auto inventories.
- Enhancing registration fees for new vehicles will also be kept on hold till June 2020.
- BS-IV vehicles purchased till 31.03.2020 will remain operational for entire period of registration.
- From October 1, 2019 all notices and summons by the Income Tax Department would be generated by a centralized computer and would carry a unique code to end harassment of taxpayers.
- The Centre has announced an additional ₹20,000 crore of liquidity to the housing finance companies, over and above the ₹10,000 crore earlier announced.
- Startups get relief as angel tax provisions will not be applicable on them and their investors.
Liquidity in the market:
- Government to infuse upfront ₹70,000 crore into public sector banks to enable release of ₹5 lakh crore liquidity in the market.
- All pending GST refunds to MSMEs till date shall be paid within 30 days and future refund matters to be sorted out within 60 days. Dues of PSUs pending to MSMEs are around Rs 60,000 crores across PSUs.
- The government will also establish an organization to provide credit enhancement for infrastructure and housing projects.
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