FM Nirmala Sitharaman Lays Road Map To Take On Sluggish Economy Claiming Indian Economy Remains Among The World’s fastest Growing Economies

INDIA’s first full-fledged Finance Minister Nirmala Sitharaman has announced a slew of measures to tackle economic slowdown and depressed capital markets amidst gloomy world trade caused by varied factors. The measures listed out on Friday, August 23 include rollback of the surcharge on foreign and domestic portfolio investors, to perk up consumer demand and investments. The controversial surcharge on the Foreign Portfolio Investment (FPIs) resulted in the flight of investors was imposed in the Union Budget last month. “The enhanced surcharge levied by Finance Act, 2019 on long and short term capital gains tax is being withdrawn,” Sitharaman said   claiming that the Indian economy is among the fastest one at a media briefing in New Delhi. She had earlier interaction with the representatives of the stake holders. Sitharaman also said there would be two more sets of announcements in the coming few weeks aiming at homebuyers and real estate companies. Among other steps announced by the FM were enhancement of liquidity of banks, to shore up purchases by consumers, easy goods and service tax (GST) refunds to micro, small and medium enterprises, easing conditions for a beleaguered automotive sector, and exempting all eligible start-ups and their investors from the “angel tax”. Banks would now be more prompt with transmission of rate cuts and launch repo-rate linked products. There would be a more transparent one-time settlement policy for the dues of micro, small and medium enterprises (MSMEs).The government and state-owned companies would release pending payments worth as much as Rs 60,000 crore, and Aadhaar-based Know Your Consumer would be allowed for opening demat accounts and investing in mutual funds, she added. Banks would now be more prompt with transmission of rate cuts and launch repo-rate linked products, there would be a more transparent one-time settlement policy for the dues of micro, small and medium enterprises (MSMEs).The government and state-owned companies would release pending payments worth as much as Rs 60,000 crore, and Aadhaar-based Know Your Consumer would be allowed for opening demat accounts and investing in mutual funds, FM said. The FM withdrew the enhanced surcharge on long- and short-term capital gains.  Sitharaman also announced withdrawing “angel tax” provisions for the start-ups registered with the Department of Department for Promotion of Industry and Internal Trade (DPIIT) to mitigate their and investors’ genuine difficulties. Besides, a dedicated cell under a member of the Central Board for Direct Taxes (CBDT), too, will be set up for addressing the problems of start-ups.Vikas Vasal, partner at Grant Thornton India, said, “Removal of the ‘angel tax’ will go a long way in building trust and confidence in the start-ups and the investors, and shows the government’s resolve towards ease of doing business and encouraging entrepreneurship. The minister also unveiled steps that would make loans for home, vehicles and consumption goods cheaper and widely available through banking and non-banking finance companies. One of such steps was an announcement of upfront capital infusion of INR 70,000 crore into   the state owned banks to generate their additional lending and liquidity in the financial system to the tune of INR 5 trillion, She claimed adding pending payments of (GST) dues in 30 days and easier borrowing norms for the struggling micro, small and medium enterprises (MSME) sector.