New Delhi: In a bid to allay growing concerns of investors and corporate houses, Finance Minister Nirmala Sitharaman on Friday announced a string of measures to revive a flagging economy.
As expected, the Centre has decided to roll back the ‘super rich’ tax on foreign investors that it had introduced in the Union Budget to give a boost to the sagging economy.
Sitharaman had proposed increasing the effective tax rate on individuals with taxable annual income of above 20 million rupees ($283,000) by about 3%, and for those earning above 50 million rupees by 7%. Plans to exempt Foreign Portfolio Investors, who became an unintended target of the move, was first reported earlier this month.
Sitharaman announced that along with the withdrawal of additional levy on FPIs, enhanced surcharge levied on long term and short term capital gains on equities will also end. The tax measures announced on Friday will cost the exchequer Rs 1,400 crore.
Here are other major announcements from the press briefing:
- To boost demand in the auto sector, government has announced that BS IV vehicles purchased up to 2020 March will remain operational till their registration cycle and depreciation value has been doubled to 30 per cent. The introduction of higher registration fee has also been deferred till June next year.
- All pending GST refunds to be paid within 30 days to all MSMEs. Future GST refunds to be sorted out within 60 days. MSME Act will ensure one standard definition for MSME, doing away with all complications.
- Additional capital of Rs 70,000 crore to be released upfront for banks, which will enable loans worth Rs 5 lakh crore. Banks have agreed to pass on all repo rate cuts into their MCLR.
- CSR violations will not be treated as a criminal offence but as civil matter. Government says it has no intention to go the prosecution route.
- Issue of I-T orders, summons and letters etc shall now go through a centralised system from October 1, said FM Sitharaman. All assessments will be cleared in three months.
- More credit support for purchase of homes, vehicles and consumption goods. Additional liquidity support to housing finance companies by National Housing Board increased to 30,000 crore from 20,000 crore.
- NFBCs will now be able to use Aadhaar-authenticated KYCs to simplify the taking up of credit, said FM Sitharaman.
Expressing optimism about the country's state of economy, Sitharaman said India's growth still much higher than global growth.
"I want to assure that we are responsive to changes in the economy. Reforms is a continuous process for this government. Now, faster approvals are being given for mergers and acquisitions. GST filing will also be simplified further with fewer forms and will meet GSTN officials to remove further glitches in GST filing process," she told reporters. "US, Germany are seeing inverted yield curves, indicating lower growth," she said.
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