The Finance Minister of India has recently introduced numerous economic measures aimed at revitalizing the nation’s economy, which has been experiencing a slowdown. These measures are seen as an attempt to not just stimulate fiscal growth but also to put an end to tax terrorism. This move comes amidst international economic institutions such as Moody’s Investors Service revising India’s growth estimate downward from 6.8% to 6.2% in light of the current fiscal year.
Easing Tax Burdens:
According to the announcement, the extra surcharge on any capital gain from the sale of shares, which was part of Budget 2019, has been eliminated. The maximum surcharge is thus brought back to the previous budget level of 15%. Such a move is likely to prevent the outflow of Foreign Portfolio Investments (FPIs), considering that shares worth over Rs 22,000 crore were sold in July and August 2019 alone.
Boosting the Banking Sector:
The government aims to speed up the capital infusion of Rs 70,000 crore for public sector banks, which was announced in Budget 2019. This strategy is expected to enable banks to lend more easily to businesses and persona loan buyers, thereby creating demand for homes and automobiles. In addition, banks are being directed to link their loan rates to the Reserve Bank of India’s repo rate. This would mean cheaper and faster loans for customers.
Table of Key Facts:
| Economic Measure | Effect |
|---|---|
| Removal of Extra Surcharge on Capital Gains | Prevents outflow of FPIs |
| Capital Infusion for Public Sector Banks | Enables banks to lend more, boosting demand |
| Linking Loan Rates to RBI’s Repo Rate | Cheaper and faster loans for customers |
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