FM announces measures to boost economy
In a bid to check with weakening economic growth, Finance Minister Nirmala Sitharaman announced on 23 Aug 2019 withdrawal of enhanced surcharge on Foreign Portfolio Investments (FPIs), Goods and Services Tax (GST), Non-Banking Finance Companies (NBFCs), Automobile and property sectors.
The Government has restored pre-budget position on FPIs by withdrawing enhanced surcharge. The decision to withdraw enhance surcharge levied by the Finance No. 2 Act 2019 would encourage investment in capital market. Along with this, surcharge would be withdrawn on domestic investors in equity.
Corporate Social Responsibility (CSR) violations will become civil liabilities and not a criminal offence. From 1 October 2019, all the Income-tax orders, notices, summons, letters among others shall be issued through a centralised computer system with a computer-generated unique ID Number.
For banks and MSMEs, the Minister announced Rs.70,000 crore of capital upfront for bank capitalisation. The Rs.70,000 crore upfront capital infusion into public sector banks is likely to generate additional lending and liquidity to the tune of Rs.5 lakh crore, the Finance Minister said at the press conference.
The banks will pass on RBI rate cut benefits to borrowers through the Marginal Cost of Funds based Lending Rate (MCLR) reduction.
To bring in efficiency, loan documents have to be returned in 15 days of loan closure which will benefit borrowers who have mortgaged assets. Also, banks will have also decided to launch repo-rate linked interest rates. This will reduce EMI housing loans and make working capital cheaper.
GST filing will be further simplified to meet the GSTN and to remove further glitches in the system. All pending GST refunds due to MSMEs shall be paid within 30 days from 23 August 2019. Future GST refunds to MSMEs will be paid within 60 days.
The National Housing Bank funding will be increased to Rs.30,000 crore from Rs.20,000 crore. NBFCs will be now be allowed to use Aadhar based KYC of bank for their customers.
The Sec 56(2)(viib) of IT Act Dedicated cell at CBDT for addressing challenges of startups will be withdrawn while Sec 56(2) (vii)(b) will not apply to DPIIT registered startups.
BS4 vehicles purchased before 31 March 2020 will remain operational till validity of the car’s registration. But higher vehicle registration fee will be deferred till June 2020.
Additional 15% depreciation on all vehicles to be allowed for all vehicles bought from now till 31 March 2020, taking the total depreciation to 30%. This would boost auto sale in the country as market has been hit by declining consumer interests.
India’s Gross Domestic Product growth is expected to soften further in the April-June 2019 quarter, said analysts, pointing to the five-year low of 5.8% in January-March quarter.
On the employment front, auto sector has laid of 350,000 workers since April and the country’s all time favourite cookie maker Parle has laid off 10,000 workers as consumer demand weakened. fiinews.com