The Central government Friday announced a raft of measures to boost economic growth from a five-year low. Finance Minister Nirmala Sitharaman addressed a press conference, where she said the government would withdraw higher taxes on foreign portfolio investors, as announced in the Budget and also withdraw the surcharge on long- and short-term capital gains.
Here are 10 major announcements made by Finance Minister Nirmala Sitharaman
- In a major step to bolster consumption, the government announced the banks have decided to cut interest rates, a move that would lead to lower EMIs for home, auto and other loans.
- While the applicability of higher income tax surcharge on those earning more than Rs 2 crore a year has been withdrawn for foreign and domestic equity market investors, demand for auto sector was sought to be raised by slew of measures. The steps include a plan to encourage scrapping of old vehicles and removal of ban on government departments in buying new petrol/ diesel vehicles.
- In a bid to give a fillip to job-creating Micro, Small and Medium Enterprises (MSME), Sitharaman said pending GST refunds would be done within 30 days, while startups - a major avenue for employment and new entrepreneurship - would be exempt from so-called 'angel tax'.
- Nirmala Sitharaman also announced an immediate infusion of Rs 70,000 crore into banks to boost their liquidity and lending capacity of banks by Rs 5 lakh crore while housing finance companies would get up to Rs 30,000 crore with a view to reviving the real estate sector.
- Sitharaman said banks would be required to link lending rates to the Reserve Bank of India's benchmark rate in order to accelerate the transmission of the central bank's policy easing. She said the move would also lead to cheaper working capital loans for the industry.
- For the auto sector, the finance minister doubled depreciation to 30 per cent and lifted the ban on government departments to buy new vehicles.
- BS-IV vehicles purchased till March 31, 2020, before the country switches to lower-emitting BS-VI vehicles, would continue to be operational valid for till their registration period.
- The Finance Minister also assured the industry that tax authorities will not "overreach" in line with Prime Minister Narendra Modi's message of respecting wealth creators. Income tax notices and orders would be only issued through a centralised system to curb harassment.
- Also, violation of Corporate Social Responsibility (CSR) obligations would not be treated as a criminal offence and only as civil liability, the minister said.
- Other measures announced to boost the economy include setting up of an entity for credit enhancement for infrastructure and housing projects, a task force to finalise the pipeline of infrastructure projects and simplification of Know Your Client (KYC) procedure to improve market access for foreign investors.
On revenue collection meeting Budget target, Sitharaman said the trends are showing a comfortable level of collection. The government is confident of meeting the target set without any kind of overreach by tax authorities, she added. The government has set a fiscal deficit target of 3.3 per cent of the GDP for the current fiscal.
Nirmala Sitharaman's full press conference