Economic Measures to Boost Economy by the Finance Minister

Chief Economic Advisor Krishnamurthy Subramanian on Friday said the government is focusing on increasing consumption to boost economic growth.

Presenting steps taken by the government in the past few months to pull the economy out from a six-year low growth, he said the measures include corporate tax cuts to improve risk-return of companies.

Here's a list of all measure announcements that were made:
*Economic survey outlined a plan to make India $5 trillion economy with emphasis on driving up investment. On the consumption side, the government has taken steps to help the NBFCs and HFCs.
*The govt provided support to NBFCs/HFCs under the partial credit guarantee scheme. The govt sanctioned support for Rs 4.47 lakh crore to NBFCs & HFCs which includes Rs 1.29 lakh crore for pool buyout of assets.

*Within two days of cabinet approval, 17 proposals worth more than Rs 7,000 crore approved. Proposals worth Rs 20,000 crore will be approved over next two weeks under the partial credit guarantee scheme.

*On investment side, the government has taken steps to boost investment, support real estate, credit expansion, corporate tax and bank recapitalisation.
*To boost liquidity in the market, the government has cleared dues worth more than 60% of 32 CPSEs in the last two months.
* Under the new external benchmarking scheme announced by the RBI, more than 8 lakh or Rs 72,201 crore worth of loans sanctioned under the new regime till Nov 27.

*66% of Budgeted capex expenditure of Rs 3.38 lakh crore has been taken so far. Higher government capital expenditure allows crowding in of private investment. April-Nov capex of 32 CPSEs is at Rs 98,000 crore. Railway and road ministries will have undertaken capex of Rs 2.46 lakh crore by December 31, he said.
*Rs 60,314 crore of capital has been infused into PSU banks. Lenders have disbursed Rs 2.2 lakh crore to corporates and Rs 72,985 crore to MSMEs.

*FDI inflows of $35-billion in first half of FY20 vs $31 billion in the same period last year has been achieved.
*Rs 1.57 lakh cr tax refunded this yr vs Rs 1.23 lakh cr last yr: Revenue Secretary. The step will boost consumption in economy. Income tax refund up 27% so far in FY20.
*Realty fund of Rs 25,000 crore has been created for last mile funding for stalled projects. Necessary changes in IBC made to allow projects facing insolvency to avail funds under scheme.

*Unified regulator for international financial services enable capital flow without any hurdles.
*Important changes in IBC: Ringfencing successful bidders of stressed assets from prosecution.
For an indepth study of the Major Government Interventions by Government read the following PDF or click on the following Link: Major Government Interventions to Boost the Economy:Major Interventions Measures to Boost Economy
On 16th December 2019 the Finance Minister Mrs. Nirmala Sitharaman said that Govt. was taking steps to Boost Consumption.

Under the partial credit guarantee (PCG) schemes for NBFCs, 17 proposals worth a total Rs 7,657 crore have been okayed within two days of the cabinet deciding to lower the ratings threshold from AA to BBB+ for asset pools and clearing support for borrowers that had slid into SMA-0 category. SMA refers to Special Mention Account, a bad loan early warning system.

The chief economic adviser Krishnamurthy Subramanian classified the steps that have been taken by the government in recent months into three
- those that support consumption,
- those aimed at boosting investment,
- and reform measures.

I-T Refunds
Other measures in the consumption basket include clearing government and public sector unit (PSU) dues, and supporting micro, small and medium enterprises (MSMEs) via bill discounting and tax refunds.
Revenue secretary Ajay Bhushan Pandey said the income tax department has issued refunds worth Rs 1.57 lakh crore in the first eightand-a-half-months of the current fiscal compared with Rs 1.23 lakh crore in all of FY19, which will also help consumption.

The total sanctioned support to NBFCs and HFCs is Rs 4.47 lakh crore, which includes Rs 1.29 lakh crore for pooled buyouts of assets. The government and PSUs have cleared dues up to Rs 61,000 crore previously, in two stages, which has injected funds into the system. PSU dues are now at Rs 4,877 crore.
The CEA said “Together, these four measures are intended to bring more cash flow and foster consumption in the economy”.

The Rs 25,000 crore SWAMIH (Special Window for Affordable and Mid-Income Housing) Investment Fund to get stalled real estate projects moving is fully operational and the investment committee is completing due diligence on the first set of deals, the CEA said. As many as 13 domestic investors have joined the fund including Housing Development Finance Corp, State Bank of India and the Life Insurance Corp of India, committing a corpus of Rs 10,530 crore.

“This fund is fully operational and the investment committee is completing due diligence on the first set of deals today as we talk,” Subramanian said, adding the necessary changes have been made in the Insolvency and Bankruptcy Code (IBC).
The government expects the real estate fund to have a bigger impact on the economy through linkages.

Sitharaman refused to comment on the state of the economy but promised support where needed. “I am looking at the economy, where I need to intervene. I am intervening and I shall continue to, addressing the problem of industry as and when it rises. So, I am not yet in that stage to say any predictions,” she said in response to a question on a likely recovery.
The Indian economy grew 4.5% in the September quarter and data released on Thursday showed industrial production contracted for a third month running in October, falling 3.8% from a year ago.
She refused to comment when asked if the economy had entered a period of stagflation with inflation rising and growth slowing. “No comments on that. I have heard it. Stagflation is the narrative which is going on. I am hearing it,” she said. The FM promised help to those unable to get credit from banks.

“If there are people who feel there is difficulty, that they are not getting the credit that they want from the banks, they are welcome to approach us,” Sitharaman said, adding that lenders had engaged with borrowers through outreach programmes.

On 16th December Speaking at the India Economic Conclave, Finance minister Nirmala Sitharaman said that the govt is making sure steps are taken to improve consumption and put money in the hands of the consumer.
To achieve that goal, the government is working to give a push to schemes like MGNREGA and PM Kisan to put money into the hands of the consumer.
She said that the government has expedited payments to those who have rendered services especially the MSME sector.
She said that the government is making all efforts to take India to the $5 trillion GDP goal.
She acknowledged that the growth in the GST collection is not as much as the government wanted it to be. She listed out the extension given to flood-affected states on filing returns and the slowdown in consumption in certain sectors as reasons for the shortfall in collection.

Source: Economic Times & (Major Government Interventions to Boost the Economy)

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