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FM Nirmala Sitharaman announces FPI relief, boost for PSBs, sops for motown

Updated : August 23, 2019 06:26 PM IST

Finance Minister Nirmala Sitharaman addressed the media on the state of the economy on Friday.

She started by saying that reforms were the top focus of this government and an ongoing endeavour.

The Finance Minister's first announcement was that CSR violations would not be treated as a criminal offence but a cilvil one.

Her second announcement was a big and expected one. The government has withdrawn the enhanced surcharge on gains by FPIs and domestic investors.

In July, the Indian equity markets bled as FPIs turned net sellers, withdrawing Rs 12,419 crore from the market. Sitharaman had held consultations earlier this month with stakeholders to hear their problems.

The third announcement was that there will be no angel tax on start-ups registered with DPIIT (Department of Industrial Policy and Promotion).

The fourth announecment was regarding the banking industry. Home and auto (secured) loans will now become cheaper as banks's lending rates will now be linked with MCLR ( Marginal Cost of Funds based Lending Rate)

On the subject of customer ease, the finance minister announced that loan documents will now be given back to the customers within 15 days of loan closure.

The next step announced by the finance minister was on supporting NBFCs (Non-bank financial institution) and HFCs . Additional liquidity to housing finance companies by NHB has been increased from Rs 20,000 cr to Rs 30,000 crore.

On the subject of pending GST refunds to MSMEs, the finance minister announced that all pending due would be cleared in the next 30 days. Going forward she also said that refunds would be paid within 60 days from the date of application.

MSME (Micro Small & Medium Enterprises) definition has been a debated subject. The finance minister announced that the MSME Act will be ammended soon and a single definition for MSME would be announced.

Late payment of dues by the government has been a constant complain by teh industry. The finance minister announced that a committee would monitor this going forward so that the liquidity situation in the country would improve.

Nirmala Sitharaman also announced a new task force which would handle Rs 100 lakh crore for developing modern infrastructrure in the next five years.

Coming to the auto sector, the FM clarified that BS-4 vehicles can be used till their registration period. Also all vehicles acquired from now till March 2020 will be eligible for additional 15 percent depreciation. Furthermore, Sitharaman said that registration fee hike has now been postoponed to June 2020. She also said that in order to boost demand, the government shall lift ban on purchase of new vehicles in govt departments.

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Earlier, the FM compared India's economy to the rest of the emerging economies and said that India was well placed compared to its peers. The FM elaborated that global situation looked bleak and that the global projected GDP growth was 3.2 percent and could be revised downwards.

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The Finance Minister had earlier this month also held a range of consultative meetings with representatives from various sectors of the industry to address concerns of economic slowdown. The minster had said that she would talk about ways of tackling the slowdown across sectors after studying the feedback from the representatives.

Follow our complete coverage of measures announced by finance minister Nirmala Sitharaman here.