The government on Friday decided to rollback enhanced surcharge on FPIs and on domestic investors investing in equity markets. The enhanced surcharge levied on gains arising from transfer of equities and shares was introduced in the Budget last month sparking sharp criticism from all quarters and a downward slide in the equity markets.
Finance Minister Nirmala Sitharaman made the announcement during a press conference on Friday evening. The move comes days after Prime Minister Narendra Modi in his Independence Day address had said that wealth creators should be respected and not be eyed with suspicion. Underlining Modi’s statement, Sitharaman said it was also the philosophy with which Budget was presented.
“In order to encourage investment in capital market, it is decided to withdraw enhance surcharge levied by the Finance No. 2 Act 2019. In simple words, the enhance surcharge on FPI goes, surcharge on domestic investors in equity goes. Pre-budget position is restored,” she said.
Also announcing relief for consumers, she said banks have agreed to make home loans and auto loans cheaper by passing on any rate cut by the RBI through MCLR reduction to benefit all borrowers.
“This will result in reduced EMIs for housing loans, vehicles & other retail loans, by directly linking repo rates to the interest rates… People were saying that the benefit of rate reductions don’t reach them at all, or reaches in trickle. There was an across the board grievance,” she said.
With economy going through a slowdown, the Finance Minister sought to reassure people to have faith in the Indian economy. She said India’s growth rate was high in comparison to many countries. She said the global growth was 3.2 per cent which may be revised further downwards as the global demand was weak.
“It is not just the story of emerging economies but advanced economies are also facing this. Due to the US-China trade war and currency devaluation by China, a volatile situation has developed in global trade… India’s economic growth rate still higher compared to global growth rate,” she said.
Announcing a slew of measures to boost confidence in the Indian economy, she said CSR violations would no longer be treated as criminal offence but would instead be a civil liability. She also announced that the government would release Rs 70,000 crore upfront for state-run banks as announced in the Budget.
The Minister added that issue of all Income Tax Department orders, notices, summons would go through a centralized system after October 1 with a unique Document Identification Number (DIN) attached to them.
“Unless a notice goes through central clearance and has DIN number, it need not be taken seriously by any assessee at all. All earlier notices will be cleared before October 1 and uploaded again for any action to be taken on them,” Sitharaman said, adding that no notice would keep hanging forever as all notices would need to be disposed off within three months of date of reply.