Several new rules, policy decisions that were to come into effect from the new financial year 2021-2022 starting today have either been deferred or rolled back by the government and the regulators for various reasons.
Here’s a look at what’s changed, and what’s not:
Small Savings Rate Cut
Within hours of notifying steep cuts in the Small Savings Rate, the government has now rolled back the changes , saying the orders were issued by “oversight”. Last evening, the government had notified cuts to the tune of 40-110 basis points across small savings schemes.
Reversing the decision within hours, Finance Minister Nirmala Sitharaman tweeted this morning, "Interest rates of small savings schemes of the government of India shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn."
The interest rate on Public Provident Fund or PPF would have been reduced from 7.1 per cent to 6.4 per cent, its lowest since 1974. National Savings Certificates or NSC would be down to 5.9 per cent from 6.8 per cent. The highest cut of 1.1 per cent was effected in the one-year term deposit, bringing it down to 4.4 per cent from to 5.5 per cent earlier.
If these rate cuts had been implemented, it would have been the second such cut for small savings rate in a year and brought down interest rates to a four-decade low. This would have been a massive blow to millions of savers in the country.
The opposition has termed the flip-flop a move driven by the election agenda. Congress leader Priyanka Gandhi tweeted this morning, asking if the Centre’s turnaround was a case of “oversight”, as claimed, or one of election-driven “hindsight”.
RBI's Auto-Debit Rules
In a big relief to customers across banks, the Reserve Bank decided to extend the timeline for the stakeholders to migrate to a new framework for processing of e-mandates on recurring online transactions by six months to September 30, 2021. The deadline was set to expire on March 31.
Implementing this decision by March 31 would have hit auto-debit payments on third party sites such as Netflix, Amazon monthly renewal or utility bill payments on merchant websites, till such time that banks upgraded their IT infrastructure, and customers re-registered these billers on the net banking site as a one-time activity.
Given that the framework was not fully implemented by banks, RBI extended the deadline to prevent any inconvenience to the customers because of lack of preparedness by the system.
"This non-compliance is noted with serious concern and will be dealt with separately. The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default," the RBI said, adding any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action.
PAN Card- Aadhaar Linkage
In June last year, the government had extended the deadline for linking PAN with biometric Aadhaar to March 31, 2021, and warned that PAN cards would be inoperative from April 1, 2021 if this wasn’t done.
Yesterday, the government extended the deadline for linking PAN with Aadhaar for three months , until June 30.
“Keeping in view the difficulties faced by the taxpayers, the Central Government has issued a notification today extending the last date for the intimation of Aadhaar number and linking thereof with PAN to 30th June 2021, the Central Board of Direct Taxes (CBDT) said in a statement.
ECLGS Scheme
The government also extended the Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, other stressed sectors from March 31 originally to June 30, 2021. It also expanded its scope to cover enterprises in hospitality, travel and tourism, leisure and sporting sectors via ECLGS 3.0.
"In recognition of the continuing adverse impact of COVID-19 pandemic on certain service sectors, the government has now extended the scope of Emergency Credit Line Guarantee Scheme (ECLGS) through introduction of ECLGS 3.0 to cover business enterprises in hospitality, travel & tourism, leisure & sporting sectors which had, as on 29.02.2020, total credit outstanding not exceeding Rs 500 crore and overdue, if any, was for 60 days or less, on that date i.e. 29th Feb 2020," the Finance Ministry said in a release.
ECLGS 3.0 will involve the extension of credit of up to 40 percent of total credit outstanding across all lending institutions as on February 29, 2020, compared to only 20 percent allowed under the previous ECLGS. The tenor of loans granted under the scheme is also longer, for 6 years, including a moratorium period of 2 years.
New Wage Code
In another big relaxation for salaried employees, the government has pushed the implementation of the new wage code affecting take-home salary until a final call is taken on the matter by all states. The new wage code was expected to come into effect from April 1st, 2021 earlier. The government has deferred the decision due to pending changes in the labour codes of some states.
