All the major announcements to boost economic growth

Context

  • Union Finance Minister Nirmala Sitharaman announced a slew of measures on August 23 to prop up the slowing economy.
  • Addressing a press conference, Ms. Sitharaman sought to dispel doubts over the economy and the government’s growth agenda.
  • Announcing that the global GDP growth may be revised downwards from the current estimate of 3.2%, she said that India’s GDP continues to grow at a faster pace than the global economy and any other major economy.

Here are all the announcements she made:

FPI

– Rollback of enhanced surcharge on foreign portfolio investors levied in the Budget, to encourage investment in the capital market.

– Angel tax provisions to be withdrawn for startups and their investors.

– A dedicated cell under a member of CBDT will be set up for addressing the problems of startups.

CSR norms, capital infusion

– Violations of CSR norms under the companies law will be treated only as a civil liability and not as a criminal offence. The corporate affairs ministry would review the sections concerned under the Companies Act.

– Capital infusion of ₹70,000 crore into public sector banks, a move aimed at boosting lending and improving liquidity situation. The move is expected to generate an additional lending and liquidity in the financial system to the tune of ₹5 lakh crore.

– From October 1, all notices, summons, and orders of the Income Tax Department would be issued through a centralised computer system and would also have a a computer generated unique Document Identification Number.

– All pending all GST refunds of micro, small and medium enterprises (MSMEs) will be paid within 30 days. Also, in future, all GST refunds of MSMEs will be paid within 60 days from the date of application.

Loans, repo rate

– Loans for home, vehicles and consumption goods to become cheaper and widely available through banking and non-banking finance companies.

– Banks will launch repo rate and external benchmark-linked loan products that will lead to reduced easy monthly installments for housing, vehicle and other retail loans.

– Banks will pass on RBI rate cut benefits to borrowers through MCLR reduction.

– Working capital loans for industry to become cheaper.

– Public sector banks (PSBs) will ensure mandated return of loan documents within 15 days of loan closure.

– Additional liquidity support of ₹20,000 crore will be provided to housing finance companies (HFCs) by the National Housing Bank (NHB), thereby increasing the total support to ₹30,000 crore.

– The government announced partial credit scheme for purchase of pooled assets of non-banking finance companies and HFCs up to Rs 1 lakh crore to be monitored at highest level in each bank.

– Prepayment notices issued to NBFCs will be monitored by banks.

– NBFCs will be permitted to use the Aadhaar authenticated bank ‘Know Your Customer’ (KYC) to avoid repeated processes.

– Changes to be made in PMLA rules and Aadhaar regulations to ease the lending process.

Auto sector

– BS-IV vehicles purchased up to March 2020 will remain operational for the entire period of registration, Finance Minister Nirmala Sitharaman said.

– Both electric vehicles (EVs) and Internal Combustion Vehicles (ICV) will continue to be registered.

– Centre to lift ban on purchase of new vehicles for replacing all old vehicles by government departments.

– Additional 15 per cent depreciation on vehicles acquired from now till March 2020.

– Focus will be on setting up of infrastructure for development of ancillaries/components, including batteries for exports.

– Additional 15% depreciation to be allowed, on all vehicles acquired from now till March 2020, taking the total to 30 %.

– Revision of one-time registration fees has been deferred till June 2020.

Infrastructure

– Proposal to establish an organisation to provide credit enhancement for infrastructure and housing projects with an aim to enhance fund flows towards such projects.