Nirmala Sitharaman Presser: From GST Revision To Surcharge Withdrawal, Here's What FM Said

Amid liquidity crunch in the financial sector and weak private investment in the country, Sitharaman said that the slowdown in economy is widely visible in all advanced countries and not just in developing countries.

Nirmala Sitharaman On Economic Slowdown: FM Says India's Growth Higher Than Advanced Economies
Nirmala Sitharaman was speaking at the National Media Centre in the National Capital. (PTI)
By: ABP News Bureau
Updated: 24 Aug 2019 09:07 AM
New Delhi: Finance Minister Nirmala Sitharaman on Friday addressed a press conference explaining the state of economy of the country. Speaking at the National Media Centre in the National Capital amid liquidity crunch in the financial sector and weak private investment in the country, Sitharaman said that the slowdown in economy is widely visible in all advanced countries and not just in developing countries. "Just to give you briefly a picture of what is happening globally. The current projected global gross domestic product (GDP) growth is of about 3.2 per cent and probably is going to be even revised downwards," she said. Further speaking on tax reforms which will end the harassment of taxpayers, the Finance Minister said that all tax notices to be issued from centralised system.

"There will be faceless scrutiny from 'Vijay Dashmi' this year, which will mean that there shall not be even, that one odd over-enthusiastic officer who might go and sit & talk about things, which may be construed as harassment," Sitharaman announced. In her opening remarks, FM also claimed that India's GDP is much higher than the global growth.

Global GDP growth may be revised downwards from the current estimate of 3.2 per cent, she said adding that globally the demand was going to be weak. But the Indian economy was growing faster than the global average and all other major economies, Sitharaman added. As a result of US-China trade war and currency devaluation, very volatile situation has developed in global trade, she said.

Giving in to the demands of overseas investors, Finance Minister Nirmala Sitharaman on Friday announced rollback of enhanced surcharge on foreign portfolio investors levied in the Budget. "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 Foreign Portfolio Investment (FPI) goes, surcharge on domestic investors in equity goes. Pre-budget position is restored," she said.

"It is being done to encourage investment in the capital market," the finance minister said. The decision taken in the Budget to levy enhanced surcharge had spooked the stock markets. Following the increase in surcharge in the Budget, the effective income tax rate for individuals with taxable income of Rs 2-5 crore went up to 39 per cent from 35.88 per cent and for those above Rs 5 crore to 42.7 per cent.

Speaking about the GST issues, Sitharaman said that all pending GST refunds due to MSMEs shall be paid within 30 days, said FM Sitharaman. The request GST refunds coming from MSMEs henceforth will now be cleared within 60 days of intimation, she added. The Finance Minister also said that the housing finance companies will now get an additional Rs 20,000 crore from the NHB. "The funding to the NHB has been increased to Rs 30,000 crore, up from Rs 20,000 crore," she said.

Echoing Prime Minister Narendra Modi's Independence Day speech talking of respect for wealth creators, she said this was the spirit of her budget for FY20. Sitharaman said she held consultations with different sectors to understand their needs thereafter. "We haven't lost reforms momentum," she said.

"Violation of Corporate Social Responsibility (CSR) will not be treated as a criminal offence and instead be as civil liabilities. On or after 1st October 2019, all the Income-tax orders, notices, summons, letters, etc shall be issued through a centralised computer system," FM announced.

Further in her speech, Sitharaman also said that the government will infuse upfront Rs 70,000 cr into public sector banks (PSBs) to enable release of Rs 5 lakh cr liquidity in the market. "Banks have decided to pass on rate cuts by the Reserve Bank of India (RBI) to borrowers and has also launched repo rate or external benchmark-linked loan products," she added.