Finance Ministry had released Status Report on Implementation of Several Measures for Boosting Economy

Finance Ministry had released Status Report on Implementation of Several Measures for Boosting Economy

Finance Ministry had released Status Report on Implementation of Several Measures announced by Finance Minister for Boosting Economy

Smt. Nirmala Sitharaman, the Finance Minister had announced many short as well as long-term measures for boosting the economy on 23rd October 2019, 30th August 2019 and 14th September 2019.

Out of these a total number of 32 measures have been announced on 23rd August 2019 to boost the economy.  Out of these, 13 announcements were been fulfilled. With regard to 12 measures that have been announced on 14th September 2019 towards boosting exports, 3 announcements have been fulfilled. The rest of the announcements have been under active consideration by relevant Ministries. Furthermore, action on 1 out of 3 announcements made for the housing was completed and on the other 2 is also being taken.

A Status Report on fulfilled announcements and those under advanced stage of implementation are mentioned below: –

I. Announcements implemented:

a. Announcements made on 23rd August 2019

1.  CSR violations must not be treated as a criminal offense: It was decided that sub-section related to treating CSR violations as criminal offenses would not be notified. Hence CSR violations would not be treated as criminal offenses.

2. Issue of IT orders, notices, as well as summons, letters, etc through a centralized system: Circulars for the e-assessment scheme, Document identification number, compounding of previous offences, prosecution easing matters was issued by Department of Revenue. It is estimated that the implementation of these instructions would lead to significant improvement in the ease of doing business.

3. Relief from an enhanced surcharge on Long-term or Short-term Capital Gains: An Ordinance has been issued on 20th September 2019 amending the Income Tax Act.

4. The provisions relating to the withdrawal of Angel Tax for Startups as well as their investors: CBDT had issued a consolidated circular for assessment of start-ups (available at CBDT website) as well as a Start-up Cell under Member (IT&C) was constituted.

5. Banks to affect timely rate cuts: All 18 PSBs have reviewed their lending rates as well as are periodically affecting rate cuts in accordance with the MCLR framework prescribed by RBI.

6. Banks may launch Repo rate /external benchmark linked loan products: All PSBs had introduced Repo Rate Linked Products (RRLP).

New RBI notification made on 04th September 2019 has also mandated that all the scheduled commercial banks introduce repo-linked home loan products as well as external benchmarked linked floating rate loans for retail and MSME borrowers’ on 1.10.2019.

7. For Customer Ease, it announced that PSBs would make a certain mandated return of loan documents within fifteen days of loan closure: Every of the 18 PSBs had informed that the 15-day norm for return of security documents of loans has been in place.

In accordance with the latest data reported by PSBs, in 99.5% (3.59 lakh accounts out of 3.61 lakh loan accounts was closed from 23rd August 2019 till 30th September 2019, security documents have been released within 15 days of loan closure.

8. Protecting the honest decision making: CVC had communicated that the recommendations of the Internal Advisory Committee of the Bank relating to the classification of a case as vigilance or non-vigilance as accepted by DA and CVO would be treated as final. Furthermore, a committee comprising of an Ex-Vigilance Commissioner was set up.

9. Debenture redemption reserve removal: The Ministry of Corporate Affairs had issued Companies (Share Capital and Debentures) Amendment Rules, 2019. As the MCA had already amended the rules relating to the Debenture redemption reserve, the Securities and Exchange Board of India (SEBI) has clarified that no further amendment is necessary towards being carried in ILDS regulations.

10. BS-IV vehicles purchased till 31st March 2020 shall remain operational for the entire period of registration: Ministry of Road Transport and Highways had clarified that all the BS-IV vehicles registered on or before 31st March 2020 would remain operational for the entire period of registration.

11. Revision of one-time registration fees: M/o RT&H had deferred the increase of one-time registration fees.

12. Higher depreciation for every vehicle: The notification through the Income-tax (9th Amendment) Rules, 2019, relating to the higher depreciation for all vehicles has been issued on 20th September 2019 by the Central Board of Direct Taxes.

13. Ministry of Road Transport and Highways has clarified that both electric, as well as internal combustion engine-based vehicles, would continue to be registered as long as they meet safety and emissions standards.

b. Announcements to boost exports and Housing on 14th September 2019

1.    Revised Priority Sector Lending (PSL) standards for Export Credit: RBI had issued orders on 20th September 2019 in which it enhanced sanction limits for eligibility of export credit under PSL from Rs 25 crore to Rs 40 crore per borrower as well as removing the overall turnover limit of Rs 100 cr.

2.    Online “Origin Management System”: a Common Digital Platform for Issuance of electronic Certificates of Origin (CoO), has been launched on 16th September 2019.

3.    Fully automated electronic refund route for ITC: The integrated refund module together with single disbursement was deployed on 26th September 2019.

4.    House Building Allowance: orders relating to linking of the interest rate of HBA with 10 Year G Sec Yields issued.


II. Announcements with significant Progress

a. Announcements made on 23rd August 2019:

1. Support towards NBFCs/HFCs: the NHB Board had approved additional liquidity support towards HFCs of Rs. 20,000 crore taking the total to Rs. 30,000 crore. PSBs were supporting NBFCs. PSBs had extended total support of Rs 2.56 Lakh crore to NBFCs by means of credit and pool buyout since September 2018.

Furthermore, in accordance with the Partial Guarantee scheme, till 16th October 2019, PSBs have given sanction towards buying of Rs 21,580 crore worth of pooled assets under the scheme, as well as proposals for implementation of the guarantee are under the procedure.

2. Upfront release of Rs. 70,000 Cr., added lending and liquidity to the tune of  Rs 5 Lakh crore through providing upfront Capital to PSBs: the Upfront release of capital to PSBs was effected, with Rs.60,314 crore being infused in banks in September 2019 through recapitalization bonds, containing Rs.4557 crore in IDBI Bank.

3. Co-origination of loans through PSBs jointly with NBFCs: Till 16th October 2019, 8 PSBs had a total of 16 tie-ups in place for co-origination of loans with NBFCs/HFCs

PSBs has also executed outreach program in 400 districts during the festive season in October 2019 and have tied up or invited NBFCs/HFCs/MFIs in the direction of partnering in extending credit to last-mile clients.

4. GST Refund towards MSME within 30 days: A refund drive has been organized from 01st September 2019 to 22nd September 2019.  The sum of refund pending as of 23rd August 2019 was Rs. 10,841 crore and of these claims of Rs. 10,490 crore (97 percent) has been disposed of up to 24th September 2019.

5. Simplified KYC for FPIs: SEBI had informed that the Working Group set-up under the Chairmanship of Shri. H. R. Khan had recommended measures towards simplifying the KYC requirement for FPIs. The recommendations were approved by the SEBI Board on 21st August 2019. SEBI is expected to issue necessary circulars.

6. Rs. 100 lakh crores for developing modern infrastructure in the duration of 5 years: A Task Force was constituted in the direction of drawing up a National Infrastructure Pipeline for each of the years from Financial Year 2019-20 to Financial Year 2024-25. So far 12 meetings of Task Force were held and deliberations with 17 Ministries/Departments have been completed.

7. Boosting demand for vehicles: Department of Expenditure through O.M. No.7(1)/E.Coord./2019 dated 17th September 2019 lifted the ban on the purchase of new vehicles by Ministries/Departments. Scrappage policy was formulated and circulated for comments of stakeholders/general public by 15th November 2019.

8. The Depository Receipt Scheme 2014: The Department of Revenue, through a notification made on 18th September 2019 had notified the required Prevention of Money Laundering (Maintenance of Records) Fourth Amendment Rules 2019 for assisting the DR Scheme. Securities and Exchange Board of India (SEBI), through circular dated 10th October 2019 has issued the framework for the issue of Depository Receipts; Department of Revenue will notify the list of permissible jurisdictions where beneficial ownership requirements would be relaxed as well as the Depository Receipts scheme would be operational on the issue of the same.

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