New Delhi: Amid fears of slowdown of economy, the government on Friday offered a slew of measures such as rollback of the surcharge on foreign portfolio investors, simplifying more on taxation, strict labour laws, easy environment clearance, relief to banks, non-banking financial companies, MSMEs, auto, realty sectors and ease of doing business among others.
The move of the government came after huge criticism over the slowdown of economy. In order to allay fears among the people, the finance ministry is learnt to have forced to take such steps after reviewing the demands of different sectors.
Announcing the 32-point economy booster dose, finance minister Nirmala Sitharaman dismissed all talk about economic slowdown, saying that India’s economy is growing at a faster rate than any other major world economy. More sops are on the anvil, she said.
“Reform is a continuous process for her government and it tops the agenda. Global GDP growth may be revised downwards from the current estimate of 3.2 per cent,” she said, adding that globally the demand was going to be weak.
As far as the measures are concerned, to start with Sitharaman announced that the government withdrew surcharge on long and short-term capital gains on foreign portfolio investors levied in the Budget 2019, both for foreign and domestic investors. “The pre-Budget position is restored,” the minister said, adding that it is being done to encourage investment in the capital market.
It was, however, estimated that the surcharge affected FPIs adversely and they have withdrawn Rs 23,000 crore from domestic markets post-Budget.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,” Sitharaman said.
On banking financial health, she also announced upfront capital infusion of Rs 70,000 crore into public sector banks in order to boost lending and improving liquidity situation. “The move is expected to generate an additional lending and liquidity in the financial system to the tune of Rs 5 lakh crore,” she said.
Sitharaman also declared corporate social responsibility (CSR) as a civil offence, not a criminal one.
