Nirmala Sitharaman says all is well with economy, key announcements
Nirmala Sitharaman says all is well with economy, key announcements
Reviving domestic and foreign investments was in the focus of Nirmala Sitharaman's press conference today. Sitharaman announced rollback of surcharge on super rich, and long and short term capital gains.
ADVERTISEMENT
India Today Web Desk
New Delhi
August 23, 2019UPDATED: August 23, 2019 21:04 IST
Nirmala Sitharaman economic slowdown in India
Union Finance Minister Nirmala Sitharaman on Friday dispelled concerns about slowdown in Indian economy. (Photo: PTI)
HIGHLIGHTS
The government has withdrawn surcharge on long and short term capital gains
Notices from Income Tax department will be sent from a centralised system
Government will spend Rs 100 lakh crore on modern infrastructure in next 5 years
Union Finance Minister Nirmala Sitharaman today dismissed all talks about the economic slowdown. Sitharaman said India's economy is growing at a faster rate than any other major world economy. At a press conference in New Delhi, Nirmala Sitharaman and senior officers of the finance ministry announced a host of measures to boost the country's economy.
Surcharge on FPIs rolled back: The focus of her press conference appeared to be investment, both foreign and domestic. Nirmala Sitharaman announced rollback of the surcharge on super-rich and long and short term capital gains. The surcharge had been announced in the Union Budget earlier.
It was estimated that the surcharge affected foreign portfolio investors (FPIs) adversely. The FPIs have withdrawn Rs 23,000 crore from domestic markets post-Budget. The Budget announcement of surcharge on higher tax-income groups reportedly affected 40 per cent of FPIs.
The Budget announcement of the surcharge had pushed the effective income tax rate for individuals with taxable income of Rs 2-5 crore up to 39 per cent from 35.88 per cent and for those above Rs 5 crore to 42.7 per cent. "Pre-Budget position is restored," Nirmala Sitharaman said.
Relief for startups: Listening to the industry din, the government announced a rollback of the angel tax on the startups.
"To mitigate genuine difficulties of startups and their investors, it has been decided that section 56(2)((viib) of the Income Tax Act shall not be applicable to a startup registered with DPIIT," she said.
Also, a dedicated cell will be set up under a member of CBDT for addressing the problems of startups. "A startup having any income tax issue can approach the cell for quick resolution of the same," she said.
The angle tax was paid by the start-up on its end on the funding received from the investors.
Measures to accelerate auto market: For the auto sector, the finance minister announced a slew of measures including lifting the ban on the purchase of vehicles by government departments and allowing additional 15 per cent depreciation on vehicles acquired from now till March 2020.
Nirmala Sitharaman also announced revoking ban on the purchase of vehicles by government departments, which will now replace their old vehicles with new ones. The auto sector is facing its worst crisis in almost 20 years. Sales of cars, tractors and other vehicles have been declining for months.
Sops for infrastructure: Sitharaman announced a booster investment of Rs 100 lakh crore on building modern infrastructure over the next five years. An inter-ministerial task force will be formed to push infrastructure projects which the government hopes will boost growth and create jobs.
Cash infusion: To address liquidity crunch, the government will infuse upfront Rs 70,000 crore into public sector banks, Sitharaman said. She said the move will enable the release of Rs 5 lakh crore in the market.
From ease of doing to business to ease of living: All tax notices to be issued from centralised system to 'end harassment of taxpayers'. All old tax notices will be decided by October 1 or will be uploaded again through the centralised system.
In another important announcement, Sitharaman tried to allay concerns over alleged harassment of taxpayers saying that from October 1, all notices, summons, and orders of the Income Tax Department will be issued through a centralised computer system. It will also have a computer-generated unique Document Identification Number (DIN), she said.
Withdrawal of enhanced surcharge levied on FPIs announced, restoring pre-Budget position. It is being done to encourage investment in the capital market, the finance minister said.
On goods and services tax (GST), Sitharaman said all pending GST refund due to micro, small and medium enterprises (MSMEs) will be paid within 30 days. In the future, GST refund on the new application will be paid within 60 days.
PIB India
✔
@PIB_India
#Indian GDP growth continues high above other countries; consumption growth is down in not just emerging but also advanced economies; volatile situation has developed in global trade: Union Minister @nsitharaman #GovtBoostsEconomy
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Cheaper home, auto loans: The decline in consumption has been held as the major reason for economic slowdown -- which Sitharaman, however, dismissed saying India is on a fast track of growth while the global economy is slowing down. To boost consumption, Sitharaman announced a slew of measures for cheaper loans and increase government expenditure.
Banks will offer cheaper loans for purchasing vehicles, houses and consumer goods. The non-banking financial companies (NBFCs) can use Aadhaar-enabled KYC for onboarding customers.
CSR violation not a criminal offence: Sitharaman made another significant announcement with regard to non-compliance of corporate social responsibility (CSR). She said violations of CSR norms under the companies aw will not be a criminal offence. It will be treated only as a civil liability.
The industry had expressed concerns over penal provisions for non-compliance with CSR requirements in the amended Companies Act, 2013. The amended law requires certain class of profitable companies to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
Finance Minister Nirmala Sitharaman combats slowdown
Sitharaman announces many measures and retracts some, but will this be enough to boost growth, revive the economy
Rajeev Dubey
New Delhi
August 24, 2019UPDATED: August 24, 2019 03:47 IST
A projector malfunction briefly flashed the title of Finance Minister Nirmala Sitharaman’s presentation Measures to Achieve Higher Economic Growth even before she was to arrive at the venue for her much-awaited
press conference.
The excitement that was already building up soared as expectations of an economic stimulus seemed imminent. But that was not to be. Instead, retracting ill-conceived steps, introducing confidence-building measures, liquidity enhancement, the commitment of interest rate transmission and a lot of promises for infrastructure, home buyers and automobiles dominated Sitharaman’s announcements.
But the FM stopped well short of any tax cuts or sops the primary demand of the industry to kick-start the consumption cycle. That leaves a question: are these measures enough to revive the fast sagging economy?
Sitharaman began on a defensive note, reasoning that India is affected as much as the world is by a slowdown. But she promptly moved to make the big announcement retracting the ill-conceived higher surcharge imposed in Budget 2019 on foreign portfolio investors.
What would have been a measly Rs 1,400 crore gain for the Centre ended up spooking foreign investors and destroyed lakhs of crore of investor wealth since the Budget announcement.
The other big retraction to exempt startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) from angel tax was long expected and the Centre had already moved in that direction through announcements in the Budget.
These were, perhaps, meant to send a message to the G7 Summiteers (who congregate in France on Saturday for the 3-day deliberations) that India cares for foreign investors. It was better late than never. Both these measures will be welcomed by the stock markets Monday morning.
ADVERTISEMENT
MORE LIQUIDITY
The two major liquidity enhancement measures -- Rs 70,000 crore upfront infusion into public sector banks and an additional Rs 20,000 credit support to the SMEs -- will surely pump more liquidity into the economy, especially for SMEs.
However, the hope that PSB funding, already announced in the Budget, will create Rs 4-5 lakh crore of additional lending and liquidity may be dashed for two reasons. One, industry isn’t exactly lining up to borrow and invest lakhs of crores in new capacities since their existing capacities are already lying idle.
Two, much of this money could well go into filling the hole in PSBs’ balance sheets created by the ongoing aggressive write-off of non-performing assets. Sitharaman’s announcement that banks have agreed to link interest rates to repo rates will have limited effect on consumer and corporate interest rates if it is only prospective, which it is likely to be.
After all, in the past 4-5 years repo rates have been cut by 2.6 pc while banks have only passed on 1.1 pc to the borrowers. Unless full transmission of the past rate cuts happens, this is futile exercise because with repo rate already down to 5.75 pc now, RBI has little room to make any more drastic cuts.
GEAR SHIFT
With automobile demand shrinking for the 12th month in a row, it managed to catch the FM’s attention who exceeded the industry’s demand to raise annual depreciation for purchases this fiscal from 15 pc to 25 pc. Sitharaman allowed 30 pc depreciation instead.
This directly helps the transport sector, logistics, ride-hailing firms to replace old vehicles with new ones. Allowing government departments to start buying cars will have limited effect though clarifications regarding deferring of registration fee, continuation of IC engines and EVs in parallel allowing BS IV vehicles to be operational for entire registration period were much needed.
Industry can also look forward to a scrappage policy in the future. But GST cut from 28 pc to 18 pc as demanded wasn’t forthcoming. Besides these, everything else was more of the nature of confidence building measures some old, some new.
While antitax terrorism measures such as digital, faceless tax filing and demand raising have been announced, setting a fixed timeline for pending GST refunds will be widely welcomed. As of June-end, the Centre was still to clear nearly Rs 75,000 crore worth of GST refunds.
That they will be cleared in 30 days--and all future refunds in 60 dayswill bring certainty to a lot of businesses. An inter-ministerial task force for Rs 100 lakh crore investment; credit enhancement for infrastructure and housing sector, simplification of bond markets, auto scrappage policy and something to look forward to for the home buyers have been committed for the future.
But no slowdown in the world has been surmounted without the government taking the lead and taking a blow to its finances. Tax cuts are a must to leave disposable income in the hands of individuals and investible surplus in the hands of businesses.
ADVERTISEMENT
The earlier the Centre realises this, the quicker will be the turnaround. After all, we’ve already wasted a year waiting for the elusive private investment cycle that government is so dearly looking forward to.
Nirmala Sitharaman says all is well with economy, key announcements
Reviving domestic and foreign investments was in the focus of Nirmala Sitharaman's press conference today. Sitharaman announced rollback of surcharge on super rich, and long and short term capital gains.
ADVERTISEMENT
India Today Web Desk
New Delhi
August 23, 2019UPDATED: August 23, 2019 21:04 IST
Nirmala Sitharaman economic slowdown in India
Union Finance Minister Nirmala Sitharaman on Friday dispelled concerns about slowdown in Indian economy. (Photo: PTI)
HIGHLIGHTS
The government has withdrawn surcharge on long and short term capital gains
Notices from Income Tax department will be sent from a centralised system
Government will spend Rs 100 lakh crore on modern infrastructure in next 5 years
Union Finance Minister Nirmala Sitharaman today dismissed all talks about the economic slowdown. Sitharaman said India's economy is growing at a faster rate than any other major world economy. At a press conference in New Delhi, Nirmala Sitharaman and senior officers of the finance ministry announced a host of measures to boost the country's economy.
Surcharge on FPIs rolled back: The focus of her press conference appeared to be investment, both foreign and domestic. Nirmala Sitharaman announced rollback of the surcharge on super-rich and long and short term capital gains. The surcharge had been announced in the Union Budget earlier.
It was estimated that the surcharge affected foreign portfolio investors (FPIs) adversely. The FPIs have withdrawn Rs 23,000 crore from domestic markets post-Budget. The Budget announcement of surcharge on higher tax-income groups reportedly affected 40 per cent of FPIs.
The Budget announcement of the surcharge had pushed the effective income tax rate for individuals with taxable income of Rs 2-5 crore up to 39 per cent from 35.88 per cent and for those above Rs 5 crore to 42.7 per cent. "Pre-Budget position is restored," Nirmala Sitharaman said.
Relief for startups: Listening to the industry din, the government announced a rollback of the angel tax on the startups.
"To mitigate genuine difficulties of startups and their investors, it has been decided that section 56(2)((viib) of the Income Tax Act shall not be applicable to a startup registered with DPIIT," she said.
Also, a dedicated cell will be set up under a member of CBDT for addressing the problems of startups. "A startup having any income tax issue can approach the cell for quick resolution of the same," she said.
The angle tax was paid by the start-up on its end on the funding received from the investors.
Measures to accelerate auto market: For the auto sector, the finance minister announced a slew of measures including lifting the ban on the purchase of vehicles by government departments and allowing additional 15 per cent depreciation on vehicles acquired from now till March 2020.
Nirmala Sitharaman also announced revoking ban on the purchase of vehicles by government departments, which will now replace their old vehicles with new ones. The auto sector is facing its worst crisis in almost 20 years. Sales of cars, tractors and other vehicles have been declining for months.
Sops for infrastructure: Sitharaman announced a booster investment of Rs 100 lakh crore on building modern infrastructure over the next five years. An inter-ministerial task force will be formed to push infrastructure projects which the government hopes will boost growth and create jobs.
Cash infusion: To address liquidity crunch, the government will infuse upfront Rs 70,000 crore into public sector banks, Sitharaman said. She said the move will enable the release of Rs 5 lakh crore in the market.
From ease of doing to business to ease of living: All tax notices to be issued from centralised system to 'end harassment of taxpayers'. All old tax notices will be decided by October 1 or will be uploaded again through the centralised system.
In another important announcement, Sitharaman tried to allay concerns over alleged harassment of taxpayers saying that from October 1, all notices, summons, and orders of the Income Tax Department will be issued through a centralised computer system. It will also have a computer-generated unique Document Identification Number (DIN), she said.
Withdrawal of enhanced surcharge levied on FPIs announced, restoring pre-Budget position. It is being done to encourage investment in the capital market, the finance minister said.
On goods and services tax (GST), Sitharaman said all pending GST refund due to micro, small and medium enterprises (MSMEs) will be paid within 30 days. In the future, GST refund on the new application will be paid within 60 days.
PIB India
✔
@PIB_India
#Indian GDP growth continues high above other countries; consumption growth is down in not just emerging but also advanced economies; volatile situation has developed in global trade: Union Minister @nsitharaman #GovtBoostsEconomy
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Cheaper home, auto loans: The decline in consumption has been held as the major reason for economic slowdown -- which Sitharaman, however, dismissed saying India is on a fast track of growth while the global economy is slowing down. To boost consumption, Sitharaman announced a slew of measures for cheaper loans and increase government expenditure.
Banks will offer cheaper loans for purchasing vehicles, houses and consumer goods. The non-banking financial companies (NBFCs) can use Aadhaar-enabled KYC for onboarding customers.
CSR violation not a criminal offence: Sitharaman made another significant announcement with regard to non-compliance of corporate social responsibility (CSR). She said violations of CSR norms under the companies aw will not be a criminal offence. It will be treated only as a civil liability.
The industry had expressed concerns over penal provisions for non-compliance with CSR requirements in the amended Companies Act, 2013. The amended law requires certain class of profitable companies to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
Indian economy doing better than US, China despite global growth weak: Nirmala Sitharaman
Addressing the press conference, Nirmala Sitharaman asserted that India still the fastest economy in the world despite weak global cues.
ADVERTISEMENT
India Today Web Desk
New Delhi
August 23, 2019UPDATED: August 23, 2019 18:52 IST
Finance Minister Nirmala Sitharaman addresses press conference in New Delhi. (Photo: ANI)
Finance Minister Nirmala Sitharam on Friday said that the global growth may probably be very weak but the Indian economy is still doing better than the other countries including the United States and China. Nirmala Sitharaman made the statement in an unprecedented press conference to address the economic situation.
Nirmala Sitharaman asserted that India still the fastest economy in the world despite weak global cues.
"Just to give you briefly a picture of what is happening globally. The current projected global GDP growth is of about 3.2 per cent and probably is going to be even revised downwards," Nirmala Sitharaman said.
Asserting that the Bharatiya Janata Party (BJP)-led government at the Centre has kept all reforms at the top of all the agenda, Nirmala Sitharaman said that the government has not lost the momentum.
"It is a continuous process. Business-related reforms were carried out by this government ever since it came to power in 2014. We have not lost the momentum; we are keeping that high on agenda," Nirmala Sitharaman said.
As a result of US-China trade war and currency devaluation, the very volatile situation has developed in global trade, she said.
Echoing Prime Minister Narendra Modi's Independence Day speech talking of respect for wealth creators, she said this was the spirt of her budget for FY20. Sitharaman said she held consultations with different sectors to understand their needs thereafter. "We haven't lost reforms momentum," she said.
The finance minister's statement came a day after Niti Aayog Vice-Chairman Rajiv Kumar said the ongoing financial crisis in India is "unprecedented" and the government must take steps to handle the ongoing economic slowdown. "India was facing such an economic downturn for the first time in 70 years," Rajiv Kumar said.
Reviving domestic and foreign investments was in the focus of Nirmala Sitharaman's press conference today. Sitharaman announced rollback of surcharge on super rich, and long and short term capital gains.
ADVERTISEMENT
India Today Web Desk
New Delhi
August 23, 2019UPDATED: August 23, 2019 21:04 IST
Nirmala Sitharaman economic slowdown in India
Union Finance Minister Nirmala Sitharaman on Friday dispelled concerns about slowdown in Indian economy. (Photo: PTI)
HIGHLIGHTS
The government has withdrawn surcharge on long and short term capital gains
Notices from Income Tax department will be sent from a centralised system
Government will spend Rs 100 lakh crore on modern infrastructure in next 5 years
Union Finance Minister Nirmala Sitharaman today dismissed all talks about the economic slowdown. Sitharaman said India's economy is growing at a faster rate than any other major world economy. At a press conference in New Delhi, Nirmala Sitharaman and senior officers of the finance ministry announced a host of measures to boost the country's economy.
Surcharge on FPIs rolled back: The focus of her press conference appeared to be investment, both foreign and domestic. Nirmala Sitharaman announced rollback of the surcharge on super-rich and long and short term capital gains. The surcharge had been announced in the Union Budget earlier.
It was estimated that the surcharge affected foreign portfolio investors (FPIs) adversely. The FPIs have withdrawn Rs 23,000 crore from domestic markets post-Budget. The Budget announcement of surcharge on higher tax-income groups reportedly affected 40 per cent of FPIs.
The Budget announcement of the surcharge had pushed the effective income tax rate for individuals with taxable income of Rs 2-5 crore up to 39 per cent from 35.88 per cent and for those above Rs 5 crore to 42.7 per cent. "Pre-Budget position is restored," Nirmala Sitharaman said.
Relief for startups: Listening to the industry din, the government announced a rollback of the angel tax on the startups.
"To mitigate genuine difficulties of startups and their investors, it has been decided that section 56(2)((viib) of the Income Tax Act shall not be applicable to a startup registered with DPIIT," she said.
Also, a dedicated cell will be set up under a member of CBDT for addressing the problems of startups. "A startup having any income tax issue can approach the cell for quick resolution of the same," she said.
The angle tax was paid by the start-up on its end on the funding received from the investors.
Measures to accelerate auto market: For the auto sector, the finance minister announced a slew of measures including lifting the ban on the purchase of vehicles by government departments and allowing additional 15 per cent depreciation on vehicles acquired from now till March 2020.
Nirmala Sitharaman also announced revoking ban on the purchase of vehicles by government departments, which will now replace their old vehicles with new ones. The auto sector is facing its worst crisis in almost 20 years. Sales of cars, tractors and other vehicles have been declining for months.
Sops for infrastructure: Sitharaman announced a booster investment of Rs 100 lakh crore on building modern infrastructure over the next five years. An inter-ministerial task force will be formed to push infrastructure projects which the government hopes will boost growth and create jobs.
Cash infusion: To address liquidity crunch, the government will infuse upfront Rs 70,000 crore into public sector banks, Sitharaman said. She said the move will enable the release of Rs 5 lakh crore in the market.
From ease of doing to business to ease of living: All tax notices to be issued from centralised system to 'end harassment of taxpayers'. All old tax notices will be decided by October 1 or will be uploaded again through the centralised system.
In another important announcement, Sitharaman tried to allay concerns over alleged harassment of taxpayers saying that from October 1, all notices, summons, and orders of the Income Tax Department will be issued through a centralised computer system. It will also have a computer-generated unique Document Identification Number (DIN), she said.
Withdrawal of enhanced surcharge levied on FPIs announced, restoring pre-Budget position. It is being done to encourage investment in the capital market, the finance minister said.
On goods and services tax (GST), Sitharaman said all pending GST refund due to micro, small and medium enterprises (MSMEs) will be paid within 30 days. In the future, GST refund on the new application will be paid within 60 days.
PIB India
✔
@PIB_India
#Indian GDP growth continues high above other countries; consumption growth is down in not just emerging but also advanced economies; volatile situation has developed in global trade: Union Minister @nsitharaman #GovtBoostsEconomy
Embedded video
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5:02 AM - Aug 23, 2019
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Cheaper home, auto loans: The decline in consumption has been held as the major reason for economic slowdown -- which Sitharaman, however, dismissed saying India is on a fast track of growth while the global economy is slowing down. To boost consumption, Sitharaman announced a slew of measures for cheaper loans and increase government expenditure.
Banks will offer cheaper loans for purchasing vehicles, houses and consumer goods. The non-banking financial companies (NBFCs) can use Aadhaar-enabled KYC for onboarding customers.
CSR violation not a criminal offence: Sitharaman made another significant announcement with regard to non-compliance of corporate social responsibility (CSR). She said violations of CSR norms under the companies aw will not be a criminal offence. It will be treated only as a civil liability.
The industry had expressed concerns over penal provisions for non-compliance with CSR requirements in the amended Companies Act, 2013. The amended law requires certain class of profitable companies to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
Finance Minister Nirmala Sitharaman combats slowdown
Sitharaman announces many measures and retracts some, but will this be enough to boost growth, revive the economy
Rajeev Dubey
New Delhi
August 24, 2019UPDATED: August 24, 2019 03:47 IST
A projector malfunction briefly flashed the title of Finance Minister Nirmala Sitharaman’s presentation Measures to Achieve Higher Economic Growth even before she was to arrive at the venue for her much-awaited
press conference.
The excitement that was already building up soared as expectations of an economic stimulus seemed imminent. But that was not to be. Instead, retracting ill-conceived steps, introducing confidence-building measures, liquidity enhancement, the commitment of interest rate transmission and a lot of promises for infrastructure, home buyers and automobiles dominated Sitharaman’s announcements.
But the FM stopped well short of any tax cuts or sops the primary demand of the industry to kick-start the consumption cycle. That leaves a question: are these measures enough to revive the fast sagging economy?
Sitharaman began on a defensive note, reasoning that India is affected as much as the world is by a slowdown. But she promptly moved to make the big announcement retracting the ill-conceived higher surcharge imposed in Budget 2019 on foreign portfolio investors.
What would have been a measly Rs 1,400 crore gain for the Centre ended up spooking foreign investors and destroyed lakhs of crore of investor wealth since the Budget announcement.
The other big retraction to exempt startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) from angel tax was long expected and the Centre had already moved in that direction through announcements in the Budget.
These were, perhaps, meant to send a message to the G7 Summiteers (who congregate in France on Saturday for the 3-day deliberations) that India cares for foreign investors. It was better late than never. Both these measures will be welcomed by the stock markets Monday morning.
ADVERTISEMENT
MORE LIQUIDITY
The two major liquidity enhancement measures -- Rs 70,000 crore upfront infusion into public sector banks and an additional Rs 20,000 credit support to the SMEs -- will surely pump more liquidity into the economy, especially for SMEs.
However, the hope that PSB funding, already announced in the Budget, will create Rs 4-5 lakh crore of additional lending and liquidity may be dashed for two reasons. One, industry isn’t exactly lining up to borrow and invest lakhs of crores in new capacities since their existing capacities are already lying idle.
Two, much of this money could well go into filling the hole in PSBs’ balance sheets created by the ongoing aggressive write-off of non-performing assets. Sitharaman’s announcement that banks have agreed to link interest rates to repo rates will have limited effect on consumer and corporate interest rates if it is only prospective, which it is likely to be.
After all, in the past 4-5 years repo rates have been cut by 2.6 pc while banks have only passed on 1.1 pc to the borrowers. Unless full transmission of the past rate cuts happens, this is futile exercise because with repo rate already down to 5.75 pc now, RBI has little room to make any more drastic cuts.
GEAR SHIFT
With automobile demand shrinking for the 12th month in a row, it managed to catch the FM’s attention who exceeded the industry’s demand to raise annual depreciation for purchases this fiscal from 15 pc to 25 pc. Sitharaman allowed 30 pc depreciation instead.
This directly helps the transport sector, logistics, ride-hailing firms to replace old vehicles with new ones. Allowing government departments to start buying cars will have limited effect though clarifications regarding deferring of registration fee, continuation of IC engines and EVs in parallel allowing BS IV vehicles to be operational for entire registration period were much needed.
Industry can also look forward to a scrappage policy in the future. But GST cut from 28 pc to 18 pc as demanded wasn’t forthcoming. Besides these, everything else was more of the nature of confidence building measures some old, some new.
While antitax terrorism measures such as digital, faceless tax filing and demand raising have been announced, setting a fixed timeline for pending GST refunds will be widely welcomed. As of June-end, the Centre was still to clear nearly Rs 75,000 crore worth of GST refunds.
That they will be cleared in 30 days--and all future refunds in 60 dayswill bring certainty to a lot of businesses. An inter-ministerial task force for Rs 100 lakh crore investment; credit enhancement for infrastructure and housing sector, simplification of bond markets, auto scrappage policy and something to look forward to for the home buyers have been committed for the future.
But no slowdown in the world has been surmounted without the government taking the lead and taking a blow to its finances. Tax cuts are a must to leave disposable income in the hands of individuals and investible surplus in the hands of businesses.
ADVERTISEMENT
The earlier the Centre realises this, the quicker will be the turnaround. After all, we’ve already wasted a year waiting for the elusive private investment cycle that government is so dearly looking forward to.
Nirmala Sitharaman says all is well with economy, key announcements
Reviving domestic and foreign investments was in the focus of Nirmala Sitharaman's press conference today. Sitharaman announced rollback of surcharge on super rich, and long and short term capital gains.
ADVERTISEMENT
India Today Web Desk
New Delhi
August 23, 2019UPDATED: August 23, 2019 21:04 IST
Nirmala Sitharaman economic slowdown in India
Union Finance Minister Nirmala Sitharaman on Friday dispelled concerns about slowdown in Indian economy. (Photo: PTI)
HIGHLIGHTS
The government has withdrawn surcharge on long and short term capital gains
Notices from Income Tax department will be sent from a centralised system
Government will spend Rs 100 lakh crore on modern infrastructure in next 5 years
Union Finance Minister Nirmala Sitharaman today dismissed all talks about the economic slowdown. Sitharaman said India's economy is growing at a faster rate than any other major world economy. At a press conference in New Delhi, Nirmala Sitharaman and senior officers of the finance ministry announced a host of measures to boost the country's economy.
Surcharge on FPIs rolled back: The focus of her press conference appeared to be investment, both foreign and domestic. Nirmala Sitharaman announced rollback of the surcharge on super-rich and long and short term capital gains. The surcharge had been announced in the Union Budget earlier.
It was estimated that the surcharge affected foreign portfolio investors (FPIs) adversely. The FPIs have withdrawn Rs 23,000 crore from domestic markets post-Budget. The Budget announcement of surcharge on higher tax-income groups reportedly affected 40 per cent of FPIs.
The Budget announcement of the surcharge had pushed the effective income tax rate for individuals with taxable income of Rs 2-5 crore up to 39 per cent from 35.88 per cent and for those above Rs 5 crore to 42.7 per cent. "Pre-Budget position is restored," Nirmala Sitharaman said.
Relief for startups: Listening to the industry din, the government announced a rollback of the angel tax on the startups.
"To mitigate genuine difficulties of startups and their investors, it has been decided that section 56(2)((viib) of the Income Tax Act shall not be applicable to a startup registered with DPIIT," she said.
Also, a dedicated cell will be set up under a member of CBDT for addressing the problems of startups. "A startup having any income tax issue can approach the cell for quick resolution of the same," she said.
The angle tax was paid by the start-up on its end on the funding received from the investors.
Measures to accelerate auto market: For the auto sector, the finance minister announced a slew of measures including lifting the ban on the purchase of vehicles by government departments and allowing additional 15 per cent depreciation on vehicles acquired from now till March 2020.
Nirmala Sitharaman also announced revoking ban on the purchase of vehicles by government departments, which will now replace their old vehicles with new ones. The auto sector is facing its worst crisis in almost 20 years. Sales of cars, tractors and other vehicles have been declining for months.
Sops for infrastructure: Sitharaman announced a booster investment of Rs 100 lakh crore on building modern infrastructure over the next five years. An inter-ministerial task force will be formed to push infrastructure projects which the government hopes will boost growth and create jobs.
Cash infusion: To address liquidity crunch, the government will infuse upfront Rs 70,000 crore into public sector banks, Sitharaman said. She said the move will enable the release of Rs 5 lakh crore in the market.
From ease of doing to business to ease of living: All tax notices to be issued from centralised system to 'end harassment of taxpayers'. All old tax notices will be decided by October 1 or will be uploaded again through the centralised system.
In another important announcement, Sitharaman tried to allay concerns over alleged harassment of taxpayers saying that from October 1, all notices, summons, and orders of the Income Tax Department will be issued through a centralised computer system. It will also have a computer-generated unique Document Identification Number (DIN), she said.
Withdrawal of enhanced surcharge levied on FPIs announced, restoring pre-Budget position. It is being done to encourage investment in the capital market, the finance minister said.
On goods and services tax (GST), Sitharaman said all pending GST refund due to micro, small and medium enterprises (MSMEs) will be paid within 30 days. In the future, GST refund on the new application will be paid within 60 days.
PIB India
✔
@PIB_India
#Indian GDP growth continues high above other countries; consumption growth is down in not just emerging but also advanced economies; volatile situation has developed in global trade: Union Minister @nsitharaman #GovtBoostsEconomy
Embedded video
229
5:02 AM - Aug 23, 2019
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Cheaper home, auto loans: The decline in consumption has been held as the major reason for economic slowdown -- which Sitharaman, however, dismissed saying India is on a fast track of growth while the global economy is slowing down. To boost consumption, Sitharaman announced a slew of measures for cheaper loans and increase government expenditure.
Banks will offer cheaper loans for purchasing vehicles, houses and consumer goods. The non-banking financial companies (NBFCs) can use Aadhaar-enabled KYC for onboarding customers.
CSR violation not a criminal offence: Sitharaman made another significant announcement with regard to non-compliance of corporate social responsibility (CSR). She said violations of CSR norms under the companies aw will not be a criminal offence. It will be treated only as a civil liability.
The industry had expressed concerns over penal provisions for non-compliance with CSR requirements in the amended Companies Act, 2013. The amended law requires certain class of profitable companies to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
Indian economy doing better than US, China despite global growth weak: Nirmala Sitharaman
Addressing the press conference, Nirmala Sitharaman asserted that India still the fastest economy in the world despite weak global cues.
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India Today Web Desk
New Delhi
August 23, 2019UPDATED: August 23, 2019 18:52 IST
Finance Minister Nirmala Sitharaman addresses press conference in New Delhi. (Photo: ANI)
Finance Minister Nirmala Sitharam on Friday said that the global growth may probably be very weak but the Indian economy is still doing better than the other countries including the United States and China. Nirmala Sitharaman made the statement in an unprecedented press conference to address the economic situation.
Nirmala Sitharaman asserted that India still the fastest economy in the world despite weak global cues.
"Just to give you briefly a picture of what is happening globally. The current projected global GDP growth is of about 3.2 per cent and probably is going to be even revised downwards," Nirmala Sitharaman said.
Asserting that the Bharatiya Janata Party (BJP)-led government at the Centre has kept all reforms at the top of all the agenda, Nirmala Sitharaman said that the government has not lost the momentum.
"It is a continuous process. Business-related reforms were carried out by this government ever since it came to power in 2014. We have not lost the momentum; we are keeping that high on agenda," Nirmala Sitharaman said.
As a result of US-China trade war and currency devaluation, the very volatile situation has developed in global trade, she said.
Echoing Prime Minister Narendra Modi's Independence Day speech talking of respect for wealth creators, she said this was the spirt of her budget for FY20. Sitharaman said she held consultations with different sectors to understand their needs thereafter. "We haven't lost reforms momentum," she said.
The finance minister's statement came a day after Niti Aayog Vice-Chairman Rajiv Kumar said the ongoing financial crisis in India is "unprecedented" and the government must take steps to handle the ongoing economic slowdown. "India was facing such an economic downturn for the first time in 70 years," Rajiv Kumar said.
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