Mantra: Increasing cash flow and energizing markets

Automotive Sector

• Vehicles registered by March 2020 will be allowed to retain their registration
• An additional depreciation of 15% (total depreciation allowed increased to 30%) will be applicable for all vehicles purchased before March 2020
• Government departments will be actively told to replace their old vehicles with new ones
• Government will actively consider a scrappage policy for older vehicles but is limited by a lack of infrastructure at this time

Capital Markets

• Enhanced surcharge on FPI & domestic investors no longer applicable; pre-budget position restored. Loss to exchequer to the tune of Rs. 1,400 crores.
• Additional credit expansion for public sector banks, FM releases upfront Rs. 70,000 crores which will lead to additional systemic capital expansion of Rs. 5 lakh crores
• All banks have decided to pass any rate cut through MCLR to end customers
• All banks have agreed to directly link repo rates with interest rates
• Banks will return security related documents to customers within 15 days of the closure of the respective loan
• Online tracking of loan application (all types of facilities) will be available to borrowers– improving turnaround time
• Honest decision making in banks to be promoted through identification of accounts under vigilance
• Additional liquidity support for Housing Finance Companies (HFCs) of Rs. 10,000 crores (taking it to Rs. 30, 000 crores) from the current Rs. 20,000 crores
• Focus on partial credit guarantee scheme, quick pooling of assets and liquidity provision to NBFCs
• NBFC can use Aadhar related KYC for loan processing so that the process is not repeated
• Co-origination of banks will also apply to NBFCs as well so that synergy between the two is heightened and the systemic excess liquidity utilized properly.
• More on Credit default swaps market to follow
• RBI will be supporting bond issuances and price discovery
• Depositary Receipt Scheme: ADR and GDR financing for Indian firms
• Aadhar to be KYC for mutual fund investments and Demat accounts
• Offshore rupee market will be brought to domestic market and FM/ RBI will allow Rupee-USD derivatives trade at GIFT Special Economic Zone. More details to follow.

MSMEs

• Section 56 (2b), Angel Tax will not be applicable for registered startups
• A member of Central Board Direct Taxation (CBDT) will head a cell for quick resolution of problems faced by registered startups
• Banks to have one-time settlement provisions for MSMEs
• All pending GST refunds pertaining to MSMEs will be paid within 30 days
• Every GST related refund in the future will be cleared within 60 days for MSMEs
• Recommendations of the UK Sinha Committee have been adopted for MSMEs

Infrastructure

• An organization to provide credit enhancement for providing infrastructure and other housing projects. Name of the institution revealed soon.
• Delayed payment from Government departments and CPSCs to the infrastructure related vendors/ contractors will be monitored and payments expedited
• Inter-ministerial task force set-up for the envisioned Rs. 100 lakh crore investment in infrastructure as it is critical for the eco-system
• Central Tax Revenue targets are official and are fully attainable. No revision on this end.