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Highlights: FM announces post-Budget big bang reform measures to boost economy

In a much needed relief to the foreign portfolio investors (FPI), the government on Friday withdrew the enhanced surcharge on foreign investors. It comes along with a host of other measures related with angel tax, bank recapitalisation and income tax notices.

The government has also announced that no angel tax would be imposed on startups and their investors if registered with the DPIIT.

From October 1, all income-tax notices will be sent only via a centralised computer system, and will be disposed off within three months.

“No taxpayer will have anything to do with any notice three months after the date of the issue,” Finance Minister Nirmala Sitharaman said in the press briefing.

The government also announced that it will release upfront the Rs 70,000 crore of funds under bank recap plan announced earlier in the budget.

  • HIGHLIGHTS

  • Niramala Sitharaman’s economy booster package seems to be getting positive response. “We tend to blame the government for all our woes. Not correct. Yes the government needs to do more to stimulate demand, but we India inc. need to change -- innovate more, have sharper cost efficiencies and prepare ourselves better for global volatility and changing business models,” says Harsh Goenka, Chairman, RPG Enterprises.

  • BSIV vehicles bought before 31st March 2020 to remain operational for their full period of registration, said Finance Minister.

  • Inter-Ministerial Task Force is being formed by DEA to finalise pipeline through which various infra projects will get funded; projects to be monitored actively to accelerate capital expenditure and investment in the economy, said Sitharaman.

  • Both electric vehicles and internal combustion engines will continue to be registered.

  • BS-IV vehicles purchased upto March 2020 will remain operational till their lifetime.

  • An additional 15 percent depreciation acquired from now till March 2020, taking it to 30 percent.

  • Government will consider various measures, include a scrappage policy, but only because we need to create the necessary infrastructure for it, said FM Sitharaman.

  • Finance Minister is working to bring offshore rupee market to domestic stock exchanges.

  • Will resolve to deepen the bond market, said FM Sitharaman.

  • The government will establish an organisation for credit enhancement for infrastructure projects.
    There will be one definition for an MSME, through which companies could now feel with their business activities. It will be passed to Cabinet.

  • The request GST refunds coming from MSMEs henceforth will now be cleared within 60 days of intimation, said FM Sitharaman.

  • All pending GST refunds due to MSMEs shall be paid within 30 days, said FM Sitharaman.

  • Housing finance companies will now get an additional Rs 20,000 crore from the NHB. The funding to the NHB has been increased to Rs 30,000 crore, up from Rs 20,000 crore, said FM Sitharaman.

  • NFBCs will now be able to use Aadhaar-authenticated KYCs to simplify the taking up of credit, said FM Sitharaman.

  • Public Sector Banks will ensure the return of loan documents to customers within 15 days of the closure of a loan, said FM Sitharman.

  • Banks have decided to launch repo-rate linked products, said Finance and Corporate Affairs Minister Nirmala Sitharaman.

  • Banks have agreed to pass on all Repo Rate cuts into their MCLR, said FM Sitharaman.

  • An additional capital of Rs 70,000 crore has been sanctioned for banks, which will enable loans worth Rs 5 lakh crore, said FM Sitharaman.

  • Section 56 2(b) Of I-T Act not to be applicable for startups registered with DPTIT, said FM Sitharaman.

  • The surcharge on FPIs and domestic investors goes, says Finance Minister

  • All assessments will be cleared in three months, said FM Sitharaman.

  • Issue of I-T orders, summons and letters etc shall now go through a centralised system from October 1, said FM Sitharaman.

  • We have shifted 16 sections from prosecution to monetary penalties, said FM Sitharaman.

  • We have introduced the fixed-term employment, and announced relaxations ESIC. Faster and easier approvals for mergers and acquistions, and revision of rules for differential voting rights were also announced, said FM Sitharaman.

  • Will meet the GSTN to remove further glitches in the GST, said FM Nirmala Sitharaman.

  • We are moving towards pre-filed I-T returns, and faceless scrutiny of taxation is going to be coming in by Vijayadashmi, said FM Sitharaman.

  • We have not lost the momentum, we are keeping it high on the agenda, said FM Sitharaman.

  • The ongoing trade war between the US and China has hurt trade globally, said FM Sitharaman.

  • The United States and Germany have seen the inversion of yield curves, which shows a slowdown in consumption in these countries, said FM Sitharaman.

  • The current projected GDP growth is 3.2%, and is probably going to be revised downwards. Many organisations say that the global demand is going to be weak, said FM Sitharaman.

  • The liquidity crisis that is grappling the Indian economy is an unprecedented situation, Rajiv Kumar, vice-chairman NITI Aayog, said on August 22. “In the last 70 years nobody had faced this sort of situation where the entire financial system is under threat, and nobody is trusting anybody else within the private sector. Nobody is ready to lend, everyone is sitting on cash,” Kumar said. A persistent liquidity crunch among India’s shadow banks, which are among the major sources of financing, has disrupted India’s financial system and has been one of the reasons behind the current economic slowdown.

  • Moody’s Investors Service on Friday cut India’s GDP growth forecast for 2019 calendar year to 6.2 percent from the previous estimation of 6.8 percent. For 2020 calendar year, it reduced the estimate by a similar measure to 6.7 percent. In a statement, it said the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment.

  • Micro, Small & Medium Enterprises (MSMEs), in a recent meeting with Finance Minister Nirmala Sitharaman, raised the issue of the nearly Rs 48,000 crore of their payments stuck with PSUs. Sitharaman assured stakeholders that the payments would be released in a time-bound manner. While the MSMEs sought the release of payments within the next 45 days, Sitharaman did not state a particular time.

  • WITHDRAWN! Nirmala Sitharaman says the government has decided to withdraw the enhanced surcharge on FPI investments, as was proposed in the Budget. “Pre-Budget position is restored,” she says. The same goes for domestic institutional investments.

  • CSR violations won’t be criminal offence. MCA will review sections in companies act on CSR violations, says Sitharaman.

  • No prosecution route for company executives for failing to meet CSR requirements. The onerous CSR requirements floated earlier had spooked investors and businesses alike about serving jail time for failing to meet the new criteria.

  • “This govt, even from 2014, has kept reform at top of agenda. It is an ongoing process. Reform is a continuous process. Whether it is self-certification or environment clearance, we have not lost that momentum. About labour, taxation reforms, we have kept that momentum,” says Nirmala Sitharaman.

  • We respect wealth creators, FM Sitharaman says

  • PM said ” we respect wealth creators.” Budget was presented in this spirit, she added.

  • Action against anyone who games the GSTN system: Sitharaman to meet officials on Sunday morning to review GSTN system and assess if someone is trying to ‘game the system’ or making manual tweaks.

  • Government is responsive to the feedback from the ground, Sitharaman says. Pre-filling of Income Tax returns will significantly increase the convenience for taxpayers. Similarly, faceless assessment will cut the chances of an “overenthusiastic” tax officer harassing the tax assessees.

  • US, Germany seen inverted yields indicating recession

  • US, Germany seen inverted yields indicating recession, says Finance Minister Nirmala Sitharaman during press briefing.

  • Reform is a continuous agenda for the government and it will keep on going, says Sitharaman.

  • Reforms continue

  • Finance Minister Nirmala Sitharaman says reforms for the NDA government are a continuous process. “We have taken it for granted,” she says.

  • Currently projected gloabl GDP growth is 3.2 per cent and may be revised downwards in the coming days, says Nirmala Sitharaman.

  • US, Germany, advanced economies, emerging economies -- all under stress, says Nirmala Sitharaman, ahead of her presentation. It looks like an attempt to put India’s economic position in the global perspective.

  • Globally the growth has remained very weak. India still very much better than economies such as US and Germany.