5 big steps to improve in 28 days: Relief to investors, merger and capitalization of 10 state-run banks || WeWantWish

5 big steps to improve in 28 days: Relief to investors, merger and capitalization of 10 state-run banks || WeWantWish



New Delhi. The government took 5 major steps within 28 days to boost the economy. The Finance Ministry on Friday announced the biggest decision in this series. Finance Minister Nirmala Sitharaman said that corporate tax will be reduced for domestic and new manufacturing companies. The effect of the government's decision will be that the tax liability of companies will be reduced by about 10% according to the new rates. These reform measures began on August 23, when the government withdrew the increase in tax surcharge, giving relief to domestic and foreign investors.


First step: decision to increase surcharge on foreign-domestic investors back
On August 23, Sitharaman announced the withdrawal of the decision to increase surcharge on foreign and domestic investors. This decision will be applicable from the current financial year. On the same day, the banks announced to give 70,000 rupees for capitalization, to give the benefit of interest rate reduction by RBI to the customers immediately, for the entire period of BS-IV vehicle registration for the auto sector by 31 March 2020. Has gone. Vijayadashami announced a faceless income tax assessment to prevent incidents that would trouble taxpayers. Under this, tax related notice will be issued from computerized system only. Any communication without a computer generated unique document identification number will not be considered valid.

Second step: 100% FDI approved in coal sector
The Finance Ministry made its second announcement on the economy on 28 August. Sitharaman approved 100% foreign direct investment (FDI) in coal mining and contract manufacturing. Also announced a subsidy of 6,268 crores on sugar exports. Digital media approved 26% FDI like print media. The government has also decided to relax regulations with FDI in single brand retail. The Finance Minister said that 75 government medical colleges will be opened in the next 2 years across the country.

Third step: 10 government banks will be merged to form 4 banks, turnover will be 55.81 lakh crore.
On 30 August, the government announced the merger of 10 state-owned banks. This merger will create 4 big banks. Their total turnover will be Rs 55.81 lakh crore. There were 27 state-owned banks in the country in 2017, now it will remain 12. The government believes that this decision will increase banks' lending capacity and strengthen their balance sheet.

Fourth step: To increase cash, loan fairs will be held in 400 districts

On September 19, the Finance Minister said that government banks will organize loan fairs in 400 districts from next October. This arrangement will be for non-banking finance companies (NBFCs) and retail customers. These will also include home buyers and farmers. 200 districts will be covered in the first phase from October 3 to October 7. In the second phase, the remaining 200 districts will be covered after October 11. This decision was taken to ensure maximum loan disbursement during the festival season.


Fifth step: Corporate tax of domestic companies reduced from 30% to 22%
Finance Minister Nirmala Sitharaman said before the GST Council meeting in Goa on 20 September - Corporate tax will be reduced through an ordinance for domestic companies and new manufacturing companies. If domestic companies do not take any other exemption, then they will have to pay only 22% tax. The effective tax rate including surcharge and cess would be 25.17%. The current rate of corporate tax is 30%. Cess and surcharge attract a 34.94% tax. That is, the tax liability of companies will decrease by about 10% according to the new rates.

The decision also had an impact on the stock market. The stock market rose by 2250 points due to the announcement by the finance minister.
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