Finance Minister On Economy: Top 10 Takeaways
Finance Minister Nirmala Sitharaman made an hour-long presentation on Friday evening, listing measures announced and to be take in the future to help the economy overcome a global slowdown. The announcements ranged from equity markets to auto sector to MSMEs.
For a more detailed analysis of the impact of the measures on the macro economy read this.
Here are the top 10 takeaways...
1. Cheer For Equity Investors
No enhanced surcharge on equity capital gains for foreign and domestic investors. The measure announced in the Budget presented on July 6, and vigorously opposed by foreign portfolio investors, has been rolled back for all equity investors.
2. Much Relief For Auto Sector
The Finance Minister announced several measures to boost the flailing auto industry.
3. More Funds For PSU Banks
The FM said the ministry will upfront release Rs 70,000 crore for PSU bank recapitalisation. This amount was earmarked in the Budget presented on July 6.
4. Faster Pass-Through Of Interest Rate Cuts
The Finance Minister said that banks have agreed to pass on interest rate cuts announced so far by the Reserve Bank of India. Banks have also agreed to move to external benchmarking of rates, linking them to the repo rate.
5. More Liquidity For Housing Finance Companies
The Finance Minister announced that the additional liquidity support for HFCs will be raised to Rs 30,000 crore from NHB versus the earlier announced Rs 20,000 crore.
6. GST Relief For MSMEs
All pending GST refunds due to micro, small and medium enterprises (MSMEs) to be paid within 30 days, said the Finance Ministry. Future refunds will be paid in 60 days. This in an effort to ease liquidity and cash flow for small businesses.
7. Effort To Ensure Timely Government Payments
Several vendors and contractors working with the government and public sector units have often complained of pending payments. Many of these payments are often stuck in arbitration, in cases of cost overruns or other disputes. The Finance Minister said delayed payments from govt/CPSEs will be closely monitored.
8. Marginal Relief On CSR Norms
A recent amendment to the Companies Act, 2013 had made corporate contributions for CSR (Corporate Social Responsibility) mandatory versus the earlier comply-or-explain regime. The amendment also made any violation of the CSR provisions subject to monetary penalties and imprisonment for every officer of the company. The Finance Minister said today that CSR violations will be treated as a civil offence not criminal offence.
9. Homebuyers, Wait
Will work to resolve issues of homebuyers.
10. This Is Just The Beginning
More measures to be announced in the next few weeks.
Watch the Finance Minister’s presentation and the analysis of these changes.