Indian Economy : Government’s Move to boost economy Through Mini Budget Part 1
Indian Economy : Government’s Move to boost economy Through Mini Budget :
The government on Friday came out on the front foot to try to boost private sector sentiments, with Finance Minister Nirmala Sitharaman announcing a slew of measures to reduce the burden on the sector, including withdrawing the controversial surcharge on Foreign Portfolio Investors (FPIs) and reiterating the Prime Minister’s statement that the government “respects all wealth creators”.
Ms. Sitharaman told a press conference that the government will not treat corporate social responsibility violations as criminal offences, as it had earlier said.
“In order to encourage investment in the capital market, it has been decided to withdraw the enhanced surcharge levied by the Finance Act (No 2) Act 2019 on long and short term capital gains arising from the transfer of equity shares,” the Finance Minister announced. “In other words, the enhanced surcharge on FPIs goes and the pre-Budget position is restored.”
She, however, clarified that the increased surcharge announced in the Budget would still apply to high net-worth individuals earning more than ₹2 crore a year.
This, she said, would be the case till India’s 75th Independence Day, when the decision will be reviewed.
In keeping with the overall push to allay private sector concerns, the Finance Minister also stressed that the government was in favour of penalties rather than prosecution. This would also extend to violations of the CSR rules, which it had earlier said could attract a jail term of up to three years along with a fine. The decision had earlier spooked India Inc, and the rollback should now come as a relief.
The government also decided to front-load the ₹70,000 crore of capital infusion in public sector banks that was announced in the Budget, a move aimed at increasing private investment by facilitating greater credit disbursal by the banks. According to the government, this ₹70,000 crore will lead to about ₹5 lakh crore of fresh liquidity that can be loaned out.
Source The Hindu
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