Finance Minister Press Conference Updates: Enhanced Surcharge On Equity Capital Gains Rolled Back
Watch: Finance Minister Announces Measures To Reverse Economic Slowdown
Finance Minister Nirmala Sitharaman has announced a slew of measures to boost the economy growth which is at a five-year low.
Here are the top 10 takeaways from the press conference:
- No enhanced surcharge on equity capital gains for foreign and domestic investors.
- Several measures to boost auto industry.
- Will release Rs 70,000 crore upfront for PSU bank recapitalisation.
- Banks to pass on interest rate cuts; move to external benchmarking of rates to repo rate.
- NHB's additional liquidity support for HFCs raised by Rs 10,000 crore to Rs 30,000 crore.
- All pending GST refunds due to MSMEs to be paid within 30 days; future refunds in 60 days.
- Delayed payments from government/CPSEs to be monitored.
- CSR violations to be treated as civil offence not criminal offence.
- Will work to resolve issues of home buyers.
- More measures to be announced in the next few weeks.
The full presentation can be accessed here:
Auto Industry Reacts To Relief Measures
RC Bhargava, chairman of India's largest carmaker Maruti Suzuki Ltd., said it was heartening to see the finance minister respond to the industry's suggestions so quickly.
“There have been some positive things which were within the scope of what the government could do. They have done what was possible,” Bhargava told BloombergQuint.
“A couple of things very important need to be looked at. The sentiment for auto purchases is a very important thing. And the announcements from the finance minister have made it clear that internal combustion vehicles are not going out or something,” he said.
The decision that the government will immediately start buying cars and these will be internal combustion cars sends a very strong message to the people that the policy relating to internal combustion vehicles is very positive.RC Bhargava, Chairman, Maruti Suzuki
Puneet Anand, group market head of Hyundai India praised the interim measures too. “It will augur well for the industry. While this will soften the market and will build the momentum. But more needs to be done.”
Vinkesh Gulati, , vice president of the Federation Of Automobile Dealers Associations, said that the announcements may not give much of a boost but it will build confidence. “Besides increase in depreciation rate, there is nothing much for the industry and nor for individual buyers,” he said adding that government hasn’t offered anything that could boost the sales. “There could just be 3-4 percent impact in sales.”
Rupee Volatility To Help Exports: FM
The volatility in the rupee will help India’s exports, SItharaman said. “That itself would help the economy because exporters can look to reach greater markets across the world.”
Surcharge To Stay For HNIs
Higher surcharge will continue to apply for high networth individuals. The government will review it by 2022.
The removal of enhanced surcharge for FPIs will be effective from this year, Pandey said.
Revenue Impact On Rolling Back Surcharge On Equity Gains
The approximate revenue impact from removing the enhanced surcharge on capital gains would be Rs 1,400 crore, Revenue Secretary Ajay Bhushan Pandey said.
FM Confident Of Achieving Tax Target
Finance Minister said that based on her consultations with tax officials she "did not get the feeling that they will have to stretch themselves to far to achieve the targets."
"In UP and Karnataka trends are already showing comfortable levels of revenue collection," she noted.
“I am not getting any feeling to worry or suspect that my targets won't be achieved,” she said. “This will happen without any overreach or harassment by the tax officials.”
Her comments come after India's tax revenue collection growth till April-June fell to a 10 year low.