New Delhi: Absolutely there is no doubt that the Indian economy is going through a tough phase as the GDP growth rate for the July-September quarter came down to 4.5%, the lowest ever growth rate in six years. The first-quarter growth rate had slipped to 5 per cent.
While addressing Rajya Sabha, Union Finance Minister Nirmala Sitharaman had last month stated that the economy is going through a slowdown, but the recession has not reached as yet. Ever since the GDP growth has come down, the Centre is facing acute criticism from the Opposition members. However, in the midst of all criticism, the Union Ministry of Finance has taken a number of key measures to revive the ailing economy in the year 2019. Here are some of the major steps.
Corporate tax slash: Considered as a major fiscal booster, Sitharaman in September this year slashed corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies. The effective corporate tax rate earlier was 30 per cent. She also stated that Manufacturing companies set up after October 1 will have the option to pay 15 per cent tax. As per the announcement, the corporate tax rate will be 22 per cent for domestic companies, if they do not avail any incentive or concession.
Merger of major public-sector banks: Another way to revive the economy was to merge 10 Public Sector Banks. On August 30 this year, Sitharaman announced 4 sets of merger including the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank of India to emerge as second largest PSB with Rs 18 lakh crore business. The main features of the merging include scale, global presence and high CASA to drive growth. As per the announcement, Canara Bank and Syndicate Bank would be merged to emerge as fourth-largest PSB with Rs 15.2 lakh crore business. Then, Union Bank of India would be merged with Andhra Bank and Corporation Bank to emerge as 5th largest PSB with Rs 14.6 lakh crore business. After that Indian Bank and Allahabad Bank would be merged to emerge as 7th largest PSB with Rs 8.08 lakh crore business.
Affordable housing package: On September 14, the Finance Minister announced Rs 20,000 crore fund to help real estate developers complete housing projects that are stuck on account of last-mile cash shortage. This was done to help an estimated 3.5 lakh distressed middle-class home-buyers. She said that a special window will be set up to provide last mile funding for housing projects which are non-NPA and non-NCLT projects.
Automated Electronic Refund System: The Ministry of Finance said in May this year said that exporters of goods and services as well as suppliers to SEZ units are likely to get GST refunds automatically from June as the revenue department plans to introduce faceless scrutiny of refunds and faster claim settlement. This new system was introduced for paying GST credits to businesses.
Annual Mega Shopping Festivals: To boost exports, Sitharaman in September this year said that India will have its own version of an annual shopping festival like that of Dubai. The theme of the festival in each city will be different and span across sectors such as gems and jewellery, yoga, textiles, tourism and leather. This is being organized to benefit small and medium enterprises in the export sector.