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Measures to Achieve high economic growth

Measures to Achieve
Higher Economic Growth

Reform & Simplificaiton – An Ongoing Endeavour

Taxation – Ease of life
for tax payers – Income tax, GST, Customs

Prefilling of IT returns

Faceless scrutiny from Vijaya Dashmi 2019

Reduction in GST returns and simplification of forms

Refund process of GST simplified.

Risk based approach in dealing with tax payers

Labour laws

Fixed term employment for flexibility in hiring

• Contribution of ESIC reduced from 6.5% to 4%

Web-based and jurisdiction-free Inspections

• Inspection report to be uploaded within 48 hours

Compounding of offences

Self certification for start-ups - 6 labour laws

Environment Clearances

Single air and water clearance for MSMEs

Single consent to establish a factory by MSMEs

Corporate
Affairs

1 day to incorporate a company - Central Registration Centre for name reservation & incorporation

Integrated Incorporation Form

Shifting of 16 offence sections to monetary penalty only

Faster & easier approvals for mergers and acquisitions

Modifications in provisions for Differential Voting Rights

Withdrawal of over 14,000 prosecutions under Companies Act

Robust IBC framework with amendments supporting MSMEs and home buyers

Measures to Boost Economy
Facilitating wealth creators

1

CSR violations

Not to be treated as criminal offence and would instead be civil liability. Ministry of Corporate Affairs to review the sections under Companies Act. Government has provided companies through revised orders, time for completing ongoing projects towards fulfil their CSR obligations.

2

Issue of IT orders, notices, summons, letters etc through a centralized system

In order to address complaints of harassment on account of issue of notices, summons, orders etc. by certain income-tax authorities:

On or after 1st October, 2019 all notices, summons, orders etc. by the income-tax authorities shall be issued through a centralized computer system and will contain a computergenerated unique Document Identification Number.

Any communication issued without computer-generated unique Document Identification Number shall be non est in law.

All old notices to be decided by 1st October 2019 or uploaded again through the system

• From 1st October, 2019 all notices to be disposed off within three months from the date of reply.

3

Relief from enhanced surcharge on Long-term/ Short-term Capital Gains

• In order to encourage investment in the capital market, it has been decided to withdraw the enhanced surcharge levied by Finance (No. 2) Act, 2019 on long/ short term capital gains arising from transfer of equity shares/units referred in section 111A and 112 A respectively.

4

Withdrawal of Angel Tax provisions for Startups and their investors

To mitigate genuine difficulties of startups and their investors, it has been decided that section 56(2)(viib) of the Income-tax Act shall not be applicable to a startup registered with DPIIT.

• It has also been decided to set up a dedicated cell under Member of CBDT for addressing the problems of startups. A startup having any income-tax issue can approach the cell for quick resolution of the same.

5

Additional Credit expansion through PSBs

Upfront release of Rs. 70,000 Cr., additional lending and liquidity to the tune of ~ Rs 5 Lakh crore by providing upfront Capital to PSBs

• This will benefit Corporates, Retail borrowers, MSMEs, small traders, etc

6

Banks to effect timely rate cuts

Banks have decided to pass on rate cuts through MCLR reduction to benefit all borrowers

7

Banks to launch Repo rate /external benchmark linked loan products

Reduced EMI for housing loans, vehicle and other retail loans by directly linking Repo rate to interest rates. Working capital loans for industry will also become cheaper

8

Customer Ease

To reduce harassment and bring in greater efficiency, PSBs to ensure mandated return of loan documents within 15 days of loan closure.

Benefit: Borrowers who have mortgaged assets

9

Customer Ease: Online tracking of loan applications

On line tracking of loan applications by customers of Retail, MSME, Housing, Vehicle, working Capital, limit enhancements ,renewals etc.

Would increase transparency, reduce harassment, and improve turn around time for customers.

10

Transparent One Time
Settlement (OTS) Policy

Banks to issue improved transparent OTS policy to benefit MSME and retail borrowers in settling their overdues.

• Policy to be based on check box approach

• Benefit: Increased transparency

11

Protecting honest
decision making

To support decision making and to prevent harassment for genuine commercial decisions by bankers, CVC has issued directions that Internal Advisory Committee (IAC) in banks to classify cases as vigilance and non-vigilance.

• Decision of the IAC and bank CVO/ DA to be treated as final.

12

Support to NBFCs/HFCs

More credit support for purchase of houses, vehicles, consumption goods,

Additional liquidity support to HFCs Rs. 20,000 Cr by NHB thereby increasing it to Rs. 30,000 Cr.

Partial Credit Guarantee scheme for purchase of pooled assets of NBFCs/ HFCs upto Rs 1 lakh Cr - to be monitored at highest level in each bank

Prepayment notices issued to NBFCs to be monitored by Banks

13

Use of Bank
KYCs by NBFCs

NBFCs to be permitted to use the Aadhaar authenticated bank KYC to avoid repeated processes.

Necessary changes shall be made in PMLA rules and Aadhaar Regulations

Easier, fast tracked onboarding of customers

14

Co-origination of
loans by
PSBs jointly
with NBFCs

To take advantage of liquidity with PSBs and last mile customer connect of NBFCs, PSBs to fast track collaboration for loans to MSMEs, small traders Self Help Groups, MFI clients borrowers in coorigination mode with NBFCs

15

GST Refund to
MSME within
30 days

All pending GST refund due to MSMEs shall be paid within 30 days. In future all GST refunds shall be paid within 60 days from the date of application

16

MSME Bill
discounting

TReDS to use GSTN system in medium term to enhance market for bill discounting for MSMEs

17

MSME
Definition

Amendment to MSME Act to move towards single definition to be considered

18

UK Sinha Committee
recommendations

Decisions on recommendations such as on ease of credit, marketing, technology, delayed payments etc. within 30 days

19

Deepening of bond
markets in India

In order to improve access to long term finance, it is proposed to establish an organisation to provide Credit Enhancement for infrastructure and housing projects. This would enhance debt flow towards such projects.

• The government would soon take further action on development of Credit Default Swap markets soon, in consultation with RBI and SEBI.

• In order to improve domestic market in bonds, Ministry of Finance will work with RBI to make it more conducive for investors and bond issuers, as well as facilitate increased trading for price discovery

• Government has amended the Companies (Share capital and Debenture rules) 2014 to remove the requirement for creation of a Debenture Redemption Reserve (DRR) of outstanding debentures in respect of listed companies, NBFCs and for HFCs.

20

Access of Indian Companies to the Global Markets

• The Depository Receipt Scheme 2014 is expected to be operationalised soon by SEBI. This will give Indian companies increased access to foreign funds through ADR/GDR.

21

Use of Aadhaar based
KYCs for domestic retail Investors

In order to improve market access for the domestic retail investors, Aadhaar-based KYC to be permitted for opening of Demat account and making investment in mutual funds

Necessary notification for amendments in PMLA Rules to be issued

22

Simplified KYC for foreign and investors and FPIs

Simplified KYC procedure to improve market access for foreign investors including FPIs

23

Offshore Rupee market

To bring offshore Rupee market to domestic stock exchanges and permit trading of USD –INR derivatives in GIFT IFSC, Ministry of Finance is working with RBI to introduce this measure shortly.

24

Delayed Payments

• Delayed payments from Government/ CPSEs to be monitored by Department of Expenditure and performance reviewed by Cabinet Secretariat

25

Decision to pay 75% of the arbitration awards

• In contractual disputes by Government/ CPSEs to be implemented and monitored by Cabinet Secretariat

26

Rs 100 lakh crores for
developing modern
infrastructure over 5 years

An inter-ministerial Task force is being formed by Department of Economic Affairs to finalise the pipeline of infrastructure projects.

• The above initiative is expected to boost growth and creation of jobs. These projects would be monitored actively to accelerate capital expenditure and investments in the economy.

27

BS IV vehicles
purchased till 31.3.20

To remain operational for entire period 27 of registration

28

Revision of one time
registration fees

Being deferred till June 2020

29

Higher depreciation
for all vehicles

Additional 15% depreciation on all vehicles, to increase it to 30% acquired during the period from now till 31.03.20

30

Both EVs and ICVs
will continue to be
registered

Government’s focus will be on setting up of infrastructure for development of ancillaries /components including batteries for export

31

To boost demand

Government shall lift the ban on purchase of new vehicles for replacing all old vehicles by Departments • Government will consider various measures including scrappage policy.

32

Ministry of Finance to
continue to engage

• With stakeholders for timely and suitable interventions for different sectors