On Friday, 23 August, the Finance Minister, Nirmala Sitharaman announced a slew of measures in an effort to boost economic growth from a five-year low. These include rollback of enhanced super-rich tax on foreign and domestic equity investors; exemption of startups from 'angel tax'; a package to address distress in the auto sector; upfront infusion of INR 70,000 crore to public sector banks; CSR violations not to be treated as criminal offence and pending GST refunds to be released within 30 days. In addition, banks are to make home loans and auto loans cheaper.
The Secretary General of CAIT (Confederation of All India Traders), Mr Praveen Khandelwal, explained what these reforms mean for India MSMEs and traders. CAIT is an apex trade promotion body for 70 million traders of the country.
Important measures were announced for the automobile sector which was reeling under a lot of stress lately. To boost the morale of the auto sector, the government lifted the ban on government bodies from replacing old vehicles, among other measures.
The withdrawal of surcharge on foreign portfolio investment is a landmark step that will encourage more FDI investments in the country.
The reduction of repo rates by RBI that will be transferred to the consumers or borrowers by the banks is a major step and is expected to bolster consumption. It will encourage housing loan, auto loan and other mode of loans by which the capital will come back to the market. This way the capital shortage of the market will be eased.
CSR violation to be treated as civil liability and not as criminal offense.
The refunds of GST which were pending since long will all be cleared in 30 days. The new announcement says that the GST refund will be made in 60 days going forward and is expected help MSME sector facing MSME sector facing liquidity shortage.
The basic agenda of the announcement was to improve credit flow in the market, to improve the marketing structure and to boost technology so that trade and commerce can be upgraded to a certain level.
Clarity in definition of MSME has been accepted by the Finance Minister and it’s time to sincerely consider SMEs as the backbone of the Indian economy so that we can reach a 5 trillion economy soon, as envisioned by our Prime Minister, Narendra Modi.
The government believes in resolution and not prosecution which will certainly assure the trade and commerce of the country and that they will be created as the belt creators and not belt evaders.
An upfront capital infusion of nearly INR 70,000 crores to public sector banks which will convert into an investment of INR 5 lakh crores, has been announced.
The measures announced by the Finance Minister are likely to increase the capital flow in the market thereby enabling growth of the Indian economy.
Watch this video for detailed insights by CAIT Secretary General, Mr Praveen Khandelwal.
What do you think about these reforms? Will it help curb the slow-down in Indian economy?