Government to immediately issue Rs 70,000 crore to public sector banks
Image Source: The Indian Express

Finance Minister Nirmala Sitharaman has announced measures to revive economic growth and market. The Finance Minister said that the government would withdraw the enhanced surcharge on long-term / short-term capital gains arising from the transfer of equity shares/units for foreign and domestic investors. He also said that the GST regime would be further simplified and the government would release capital of Rs 70,000 crore to public sector banks to boost credit in various sectors of the economy.

The higher tax applies to individuals and FPIs earning more than Rs 2 crore, which led to a sharp decline in the Indian equity markets. FPI pulled out more than $ 1 billion from Indian markets in August.

Here are the key features of what the Finance Minister said:

The return of super-rich surcharge on FPIs, domestic investors will be for the entire financial year, and the withdrawal will cost the exchequer Rs 1,400 crore, the revenue secretary said

Govt withdraws enhanced surcharge on long-term/short-term capital gains arising from the transfer of equity shares/units

Govt withdraws enhanced tax surcharge on FPIs.

Withdrawal of angel tax provisions for startups and their investors

Public sector banks to get ₹70,000 crore recapitalization immediately. Additional lending and liquidity to the tune of ₹5 lakh crores can be made available by providing this capital for the PSBs

To encourage investment in the capital market, it has been decided to withdraw the enhanced surcharged levied by Finance (No. 2) Act, 2019 on long/short term capital gains arising from the transfer of equity shares/units referred in section 111A and 112A respectively.

To mitigate genuine difficulties of startups and their investors, it has been decided that Section 56(2) (viib) of the Income-Tax Act shall not apply to a startup registered with DPIIT.

It has also been decided to set up a dedicated cell under Member of CBDT for addressing the problems of startups. A startup having any income-tax issue can approach the cell for quick resolution of the same.

To reduce harassment and bring in greater efficiency, public sector bank to return of loan documents within 15 days of loan closure

Banks to make a home, auto loans cheaper

All pending GST refunds due to MSMEs till now shall be paid within 30 days from today.

Housing finance companies will now get an additional ₹20,000 crore from the NHB.

Govt departments told to replace old vehicles.

Banks have agreed to link repo rate to interest rate; this will cause reduced EMIs for housing and vehicle loans and other retail loans.

NBFC to be permitted to use Aadhaar-authenticated bank KYC to avoid repeated processes

Reform is a continuous process for the govt.

Income tax scrutiny will be faceless and randomized across the country from Vijayadashami

We are responsive, the momentum of reforms to continue.

Reform is a continuous process, and we’re treating it as a continuing endeavor

MCA to review Sections in Companies Act for CSR violations

GST regime to be simplified further

To meet GSTN officials soon to simplify the GST regime further.

Global GDP projected at 3.2% and it could be revised lower.

The US and Germany have seen an inversion of the yield curve

As a result of US-China trade war and currency devaluation, a very volatile situation has developed in global trade

India is well placed as compared to its peers.

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