New Delhi: Union Finance Minister Nirmala Sitharaman announced a slew of measures on Friday to revive the economic growth, including withdrawal of higher taxes for Foreign Portfolio Investors (FPIs), release Rs 70,000 crore for bank recapitalisation and withdrawal of angel tax provisions for start-ups and their investors.
She also announced measures to make loans for home, vehicles and consumption goods cheaper.
Here are the important announcements:
Home, vehicle loans to become cheaper
She said loans for home, vehicles and consumer goods will become cheaper and widely available through banking and non-banking finance companies.
"The 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," she said. To reduce harassment and bring in greater efficiency, public sector banks (PSBs) will ensure mandated return of loan documents within 15 days of loan closure.
"This will benefit borrowers who have mortgaged assets," Sitharaman said.
No surcharge on foreign investors
Sitharaman had introduced a surcharge on individuals and FPIs, whose annual earning is more than Rs 20 million, in her first Budget in July. This has led to a sharp fall of the equity markets in India.
On Friday, she withdrew the surcharge on long and short term capital gains arising from transfer of equity shares, restoring the pre-Budget position. This is expected to encourage investment in the capital market.
The government hopes the new measure will improve the private investment and assuage concerns of portfolio investors, to revive economic growth of Asia's third largest economy from a five year low went up to 39 per cent from 35.88 per cent and for those above Rs 5 crore to 42.7 per cent.
Good news for startups
Sitharaman announced the withdrawal of angel tax provisions of startups and their investors. A dedicated cell under a member of CBDT too will be set up for addressing the problems of startups.
Rs 70,000cr for bank recapitalisation
Sitharaman announced upfront capital infusion of Rs 70,000 crore into public sector banks to boost lending and improve liquidity.
This is expected to generate an additional lending and liquidity in the financial system to the tune of Rs 5 lakh crore.
CSR violations not a criminal offence
Allaying industry concerns, Sitharaman said 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," she said.
'Indian economy growing faster'
Addressing the press conference to make the announcements, she dispelled doubts over the economy and government's growth
agenda. "India's GDP continues to grow at a faster pace than the global economy and any other major economy," she said.
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. "But the Indian economy was growing faster than the global average and all other major economies," Sitharaman said.