Steps initiated by the Indian Government and few reforms in the budget of 2019 to boost Indian Economy for UPSC CSE/IAS prelims and mains

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Username akashaky
on 24/08/2019

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The finance minister has announced some measures to address the slowdown in the Indian economy. Let's look at the factors that are responsible for the slowdown of the Indian Economy. 

Factors that are responsible for the slowdown of the Indian Economy. 

  • Global Economic slowdown and the Trade wars between the US and China. CLICK HERE to know the important points of the US-China trade war.
  • The high rate of non-performing assets(NPA's) in the Indian Banking sectorThe bank is hesitating to lend money to the Retail borrowers MSMEs, small traders, etc. The banks are struggling to recover the huge sums of money that they had given to the private sector as a loan.
  • Demonetization: It sucked out the liquidity from the market.
  • GST: The problems in the implementation of GST has scared the investors.
  • UNION BUDGET of 2019: Some controversial measures taken by the government in the union budget of  2019.

The major announcement by Finance Minister are:-

Reform in Corporate Social Responsibility

  • According to this, every company has to spend at least 2% of the average of the last 3 years profit on social works like education, health, etc.
  •  In this year's budget, violation of Corporate Social Responsibility was made a criminal offense.
  • But now it will be treated as a civil matter and not a criminal matter.

Withdrawl of Angel Tax

  • Angel Tax: According to this if a business-man wants to invest in a start-up, they have to pay some tax to the government.
  • But now the provision of angel tx has been withdrawn.
  • This will help the startups to get the investors easily.

Tax reforms

  • The tax notices will be issued from a centralized system. There is no authority in the hands of officials of the Revenue Department.
  • All the old cases will be solved by October 1 and new notices will be uploaded again through a centralized system.

Loan Documents by public sector banks

  • The public sector bank will have to decide that they have to give the loan to the customer or not within 15 days. Within 15 days the documents shall be returned to the customer.
  • This will help in the fast processing of a loan.

GST refunds for MSMEs:-

  • All pending GST refunds till now will be paid to Micro, Small and Medium Enterprises (MSMEs) within 30d days.
  • All the cases/matters related to GST will be resolved within 60 days. 

Government to form Inter-Ministerial Task Force

  • The government is going to spend 100 lakh crore for Infra Projects. Inter-Ministerial Task Force will look after the implementation of this project.
  • The project will be monitored actively in order to optimize the capital investment.

Other major announcements.

  • The government will withdraw the enhanced surcharge on Foreign Portfolio Investments (FPIs) and domestic Investors.
  • Additional Credit expansions to reduce the problem of the high rate of non-performing assets(NPA's) in the Indian Banking sector. This will help the bank to lend money to the Retail borrowers MSMEs, small traders, etc.
  • The EMIs for housing loans, vehicle, and other retail loans will be reduced by directly linking the interest rate to the Repo Rate. CLICK HERE to understand about Repo Rate.
  • BS-IV vehicles purchased till 31-March-2020 to remain operational for the entire period of registration.

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