Finance Minister Nirmala Sitharaman on Friday announced a slew of measures to revive growth, boost consumption and uplift investors' sentiment, but more similar steps are needed soon.
Sitharaman announced cheaper retail loans for homes, cars and consumer goods, removal of surcharge on gains by domestic and foreign portfolio investors, speeding up of GST refunds, simplified KYC norms for foreign portfolio investors, lifting of angel tax on all registered startups and lifting of freeze on purchase of new government car purchases.
The Finance Minister also announced that violation of corporate social responsibility regulations by corporates will now be taken as a civil offence and not a criminal offence. She also announced amendments in the definition of MSMEs, release of Rs 70,000 crore for recapitalisation of PSU banks, speeding up of loan documentation process, and provision of Rs 30,000 crore by National Housing Bank for disbursing loans to home finance companies.
These announcements are sure to provide comfort to the market as FPIs had withdrawn nearly $3.4 billion since July. Tax rates for FPIs are expected to come down from 11 pc to 7 pc, according to market analysts.
Concerns about the state of economy had been raised over the last several weeks by several top industrialists and Nirmala Sitharaman had met most of them during the last two weeks to find out ways and means to overcome the current slowdown.
The industry was apprehensive about penal measures that had been proposed in the budget for corporates that flout CSR regulations, and the minister has sought to allay those apprehensions.
She also announced several steps to curb unnecessary harassment by Income Tax department officials, and clearly said that businessmen and investors being wealth creators will be given due respect. The Prime Minister Narendra Modi in his Independence Day speech had said that wealth creators need the nation's respect.
Nirmala Sitharaman has indicated that government would come up with more measures to give a boost to real estate sector next week. The moot point is that the Narendra Modi 2.0 government has understood the concerns of the industry and is trying to address them.
Yet much more needs to be done because this is a gigantic work. Many of the industrial sectors are facing the brunt of slowdown and they need stimulus from the government. The apprehensions being expressed are genuine and most of the people have begun losing confidence in the face of economic slowdown.
We hope the government will come up with more innovative measures to create confidence in the minds of wealth creators. The super rich class is presently paying more than 42 per cent as income tax including surcharge. The Finance Minister will also have to pay attention to this aspect too.
