Sitharaman's cure for economy: Cheaper loans, tax rollback and bank recapitalisation

Sitharaman's cure for economy: Cheaper loans, tax rollback and bank recapitalisation

Among other measures, Corporate Social Responsibility violations will now be treated as civil matters and not as a criminal one.

Her comments came as Moody's Investors Service lowered India's GDP growth forecast for the calendar year 2019 to 6.2 per cent from its previous estimate of 6.8 per cent.

Sitharaman said that surcharge on capital gains has been withdrawn.

The Finance Minister, who announced a slew of measures to revive the economy, said that Section 56 (2) VIIB of the Income Tax under which the Angel Tax provision was applicable will no longer be used against the startups. For instance, apex automotive body SIAM as well as many automakers had urged the government to reduce the GST rate on vehicles to 18 percent from 28 percent saying the move is imperative to stoke consumer demand, but no such announcement was made today.


It is being done to encourage investment in the capital market, the finance minister said. She said the Ministry of Corporate Affairs will review the sections under the Companies Act. Sitharaman said that global GDP growth is slowing down, but compared to many countries, India's position is far better. Sitharaman added that there would be no surcharge for FPI and domestic investors in the market.

In good news for start-ups, the angel tax has been removed, she said. "This will result in reduced EMIs for housing loans, vehicles and other retail loans, by directly linking repo rates to the interest rates", Sitharaman added.

Sitharaman said the government hasn't lost its momentum with regard to reforms.

For MSMEs, which are suffering from unpaid GST refunds, can expect the bounty in next 30 days, while all future refunds will be cleared in 60 days. Reform is on top of the government's agenda and the reform process will continue, she reiterated.


In a recent tweet the NITI Aayog Vice-Chairman Rajiv Kumar wrote, "I would request the media to stop misinterpreting my statement".

On Thursday, showing concern over the slowdown in the economy of the country, the Vice Chairman of NITI Aayog has termed the ongoing situation in financial sector as unprecedented and called for extraordinary steps to tackle it. Kumar said the government must do whatever it can to remove apprehensions of the private sector.

Leaders from the Indian auto industry had asked the government for a stimulus package, including GST reduction on vehicles, for the sector which has been hit by an unprecedented slump in sales.


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