Budget pledges structural reforms: Indian Chamber of Commerce

This would address the liquidity crunch in the economy, foster SME growth and bring in greater foreign funds for infra

Jul 05, 2019 02:07 IST India Infoline News Service

Corporate tax: 25% for firms with annual turnover of up to Rs 400 crore.

This would help to create a level playing field for most firms, as India’s corporate tax rate is still higher than the Asia average.
Liquidity: PSB recapitalization of Rs70,000cr; For purchase of high-rated pooled assets of financially sound NBFCs amounting to a total of Rs1 lakh crore, Govt will provide a one-time six-month partial credit guarantee to PSBs for first loss up to 10%; Investment by FIIs and FDIs in debt securities in infrastructure debt funds to be allowed; Minimum public shareholding in listed companies to be increased from 25% to 35%.

This would address the liquidity crunch in the economy, foster SME growth and bring in greater foreign funds for infra

MSME: The Government will extend pension benefits to 3 crore retail traders and shopkeepers who have revenue of less than INR 1.5 crore; Government will also create a payment platform for MSMEs to enable them to pay bills, and save time.

ICC welcomes this move and expects some more initiatives on market creation for the sector.

Factor market reforms: Labour laws will be streamlined into four basic labour codes; 10 million youth would take up industry-relevant skill training under the Kaushal Vikas Yojana

This would help in increasing employment & employability in the country

Real estate:  Tax relief up to Rs 3.5 lakh on interest paid on affordable housing including tax deduction of Rs 1.5 lakh is also available on interest paid on housing loans for self-occupied house owners. 1.95 crore houses are also proposed to be provided under PMAY Grameen by 2021.

This will boost real estate sector in the economy.

Startups:  To resolve angel tax issue, startups who file declarations will not be subjected to scrutiny in valuation; has granted extension of exemption of capital gains arising from sale of residential house for investment in startups to 31-3-2021; Listing of social enterprises and voluntary organizations working for social welfare objectives in Social stock exchanges;

These will augment ease of doing business and ease of financing for the start-up community.

Electrical Vehicle: Customs duty has been exempted on certain parts of EVs; Additional income tax deduction of Rs1.5 lakh is being awarded on the interest paid on loans for EVs.

ICC feels this will go a long way in promoting a zero carbon footprint economy for India.

ICC also welcomes 100% FDI for insurance intermediaries, zero-budget farming, push for digital payments, restructuring of the national highway programme, greater investment for Railway infrastructure. The "One Nation, One Grid" for power availability to states at affordable rates is a major reform for power distribution.

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