Economy

India's Union Finance Minister Nirmala Sitharaman made an important announcement on Friday, announcing tax exemption for corporate companies. Following the announcement of the Finance Minister, there has been a strong reaction from the Congress.

The Modi government has reduced it to 25.17 percent, reducing the corporate tax for domestic companies, new local manufacturing companies. The Finance Minister said that if a domestic company does not take advantage of any incentive, it will have the option to pay income tax at the rate of 22 percent. Companies that are choosing to pay income tax at the rate of 22 percent will not have to pay the minimum alternative tax.

Reacting to the Modi government's decision, Congress Party national spokesperson Randeep Singh Surjewala said in a press conference on Friday that Sawan's blind saying is proving true for the current government of the Bharatiya Janata Party.

Surjewala said that the economy is sinking, the country is reeling under recession and companies are shutting down. He said that GDP is falling, exports have failed and BJP ministers and government are saying that all is well. According to him everything is wrong but the rulers sitting on the chair in power do not understand it.

The Congress strongly targeted the Modi government and said that this government is one step ahead and four steps behind. The Congress spokesperson targeted Prime Minister Modi and the Finance Minister, saying that they are running the country's economy like novices.

He said that the recent decision taken by the BJP government has been taken only to save the staggering Sensex index. Under this decision, the corporate world has been given a rebate of Rs 1.45 lakh crore annually.

Apart from this, Congress spokesperson asked Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman five questions.

1. Reducing the rates of corporate tax from 30 percent to 22 percent and reducing it from 25 percent to 15 percent will result in a loss of one lakh 45 thousand crores annually. The Prime Minister and the Finance Minister should tell the country from where will this financial deficit be replenished? Will this be done once again by taxing salaried people, middle class people, poor, farmers, small shopkeepers, small businessmen and by increasing the prices of petrol, diesel, electricity? Or the country's profitable PSUs will be squeezed out.

2. Will the Prime Minister and the Finance Minister tell that an annual exemption of one lakh 45 thousand crores has been given under the corporate tax, which will increase the fiscal deficit. What is your solution for that? Now that the financial deficit will reach seven percent, which will directly affect the country's progress and inflation, then what measures do you have for it?

3. Why is the Prime Minister and the Finance Minister repeatedly defying the budget passing parliament and bypassing it? This is the first government in 70 years that rejected or amended or withdrew the budget itself within 45 days of presenting the budget. Is this kind of widespread disregard of the country's parliament and parliamentary system justified?

4. If you had to give relief in income tax, then why was it not provided relief to ordinary people, working people and middle class of this country? Even today, when the economic recession is hitting, its biggest impact is on the jobbers, middle class and ordinary people. Then the government does not give any relief to this class, why so?

5. Will recession be cured only by giving tax relief? Is this your economic vision? And if the recession is overcome by giving tax relief, then those who pay personal income tax will pay tax at 30 per cent and companies earning thousands of crores of rupees will pay tax at the rate of 22 and 15 per cent. What is right and fair in this country?

The economy was growing at eight percent in India five quarters ago. Now it has fallen to five percent. It is not that this decline has come suddenly.

In fact it is less than five percent because the quarterly growth rate figures are based on organized and corporate sector.

If the unorganized sector is not fully included in it, then it is assumed that the unorganized sector is also growing at the same rate as the organized sector.

But there are reports from all around that the unorganized sectors associated with industries like bicycle in Ludhiana and shoes in Agra have been shut down in large numbers.

If the growth rate of the unorganized sector is falling, then it is wrong to assume that the unorganized sector is growing at the pace of organized sector.

Our unorganized sector employs 94 percent people and produces 45 percent. If production and employment are decreasing where 94 percent of the people work, then demand decreases there.

This demand has come down since demonetization. Then after eight months, GST was affected and after that NPAs of banks were affected. After all, the crisis of the non-banking financial companies was affected.

That is, the economy has suffered three big shocks in three years, due to which unemployment has increased. CMI statistics show that the number of employees in India was 45 crore, which has come down to 41 crore.

This means that the jobs or work of 40 million people have been lost. When the income of such a large section is reduced, then obviously the demand will decrease. When demand decreases then the consumption capacity will decrease and when the capacity of consumption decreases, the investment will be reduced.

The rate of investment in India's economy topped 2012-13. At that time the rate of investment was increasing at the rate of 37 percent and it has fallen to less than 30 percent today.

Until investment does not increase, growth rate does not increase.

The problem is that it started from the unorganized sector and now it is gradually impacting the organized sector as well. For example, you can look at the automobile and FMCG sectors.

You must have heard about the decrease in demand for Parle-G Biscuits. It is an organized sector. These are used by people associated with the unorganized sector. When the income in the unorganized sector is low, the demand will decrease automatically. FMCG has the same condition.

If India's economy is growing at a rate of six or five per cent, then it is a very good pace. Why should consumption continue to decrease even after this? Investment should also have increased at a speed of five percent.

When consumption has come down, investment is not increasing, it shows that the economic growth rate is not five, six or seven percent, but it is growing at zero percent, because the statistics of the unorganized sector are not included in it. Are.

The day you add the statistics of the unorganized sector to it, you will know that the growth rate is zero or one percent. Statistics of the unorganized sector are collected once in five years. During this time it is assumed that the unorganized sector is also growing at the same speed as the organized sector.

This guessing was fine until the demonetisation, but as soon as the demonetisation took place, it had a tremendous impact. On unorganized areas and its decline began.

This method of including estimates of the growth rate of the unorganized sector in GDP figures after 8 November 2016 is incorrect.

It is also being said that the Indian economy is going through a recession. According to government data, the economy is going through a phase of slowdown, not recession. When the growth rate becomes negative, the situation is considered a recession.

But if the figures presented by the government right now are included in the unorganized sector, then the Indian economy is going through a recession.

The unorganized sector was beaten after demonetisation. After that GST was implemented. However GST does not apply to unorganized sectors.

GST has been impacted on organized sectors. Over 1400 changes have been made since the last two and a half years since GST came into force. This has led to a lot of confusion among the people in the organized sector.

People are not able to file GST. Around 1.2 crore people have registered for GST, but only 70 lakh people file GST and only 20 percent of the annual returns are filed.

So overall the GST has received a tremendous shock to the economy.

The problem starts with the unorganized sector and the organized sector is also not untouched. The government's tax collection has come down due to slowdown or slowdown in the economy. Last year, GST decreased by 80 thousand crores and Direct tax also decreased by the same amount.

In total, the government treasury lost Rs 1.6 lakh crore. When the income of the government decreased, it reduced the expenses. The recession will deepen when expenses are low.

It is now being said that the merger of banks will strengthen the economy. But this is wrong. The impact of the merger of banks will be seen after five to ten years. It will have no immediate effect.

The statements made by the government make it clear that it has accepted that the economy has weakened and a package is being announced one after the other. RBI is also announcing.

Not all of them are talking about recession right now, but gradually later everyone will start talking about recession, when the data of unorganized sector will be included.

RBI has released a package of 1.76 lakh crore rupees. It will also be used for the organized sector. No package has been announced for the unorganized sector. The package to increase employment has not been announced.

Where the problem started, those areas are not the focus of the government. Until the package is announced for these areas, there will be no improvement.

The sluggish economy and the loss of jobs in different sectors remain a matter of concern throughout the country.

Amidst these concerns, India's Union Finance Minister Nirmala Sitharaman said on Friday that the government is fully aware of the country's current economic condition and the country's development agenda is at the top.

Finance Minister Nirmala Sitharaman withdrew the decision to increase income tax surcharge on the income of Foreign Portfolio Investment (FPI) during the budget. Also, the decision to increase income tax surcharge for domestic investors was also canceled.

The finance minister also announced the withdrawal of the government's decision to increase the surcharge on long-term and short-term capital gains in the stock market.

Union Minister of State for Finance Anurag Thakur, Finance Secretary Rajiv Kumar, Revenue Secretary Ajay Bhushan Pandey, Economic Secretary Atanu Chakraborty, Expenditure Secretary Girish Chandra Murmu were also present in this press interaction with Finance Minister.

Announcements of Nirmala Sitharaman
- 70 thousand crore bailout packages approved for public sector banks.
- Banks will have to pay the benefit of the repo rate reduction to the customers by reducing interest.
- Loan settlement terms become easier. Loan application will be monitored online. Banks must deliver the documents to customers within 15 days of the loan withdrawal.
- No one will be harassed for tax. The tax assessment will be completed in three months. Income tax orders will be issued through the centralized system from 1 October.
- GST refund will be easy, all GST refunds will be done in 30 days. Refund will be given within 60 days of application of MSME.
- A package of Rs 100 crore will be given for the infrastructure sector. A special task force will be formed to monitor the functioning of this sector.
- CSR violation would be considered a civil offense, not a criminal.
- A separate cell will be created for matters related to startup tax settlement.
- Section 56 2 (b) of Income Tax will not apply in Startup Registration. Angel tax ends in startups.
- BS-IV vehicles purchased till 31 March 2020 will remain till their registration period and their one time registration fee has been extended till June 2020.
- Government will bring scrap policy (surrender of old vehicles) in automobile sector. The government is working on several schemes to increase the purchase of vehicles.
- The trade war between the US and China has negatively affected the situation.
- Countries like USA and China are expected to fall in demand but our growth rate is ahead of them.
- America and Germany are facing opposite yield curves, which means that demand has decreased in these countries.
- Indian economy is strong. It became easy to do business here. We are constantly easing business. All ministries are working together for this.
- Prime Minister Modi said that we respect the wealth creators. We met people from different sectors. Reform tops the government's agenda.
- Moody's has reduced India's GDP growth to 6.2 percent from 6.8 percent earlier.
- Global growth may be below 3.2% in 2019.
- It now takes less time than before to approve the environment. Income tax filing has become much easier than before. We will make GST easier.
- In terms of Ease of Doing Business, this government is far ahead of previous governments.
- Next week some announcements will be made regarding home buyers and other matters.

NITI Aayog vice-chairman Rajiv Kumar has said that the cash crunch on the Indian economy is an unprecedented situation.

Rajiv Kumar said, "In the last 70 years no one has seen a situation where the entire financial sector is going through a period of turmoil and no one in the private sector is trusting anyone else. Nobody is going to give loans to anybody. Not ready, everyone is sitting cash strapped. ''

He said during an event in Delhi that unprecedented steps need to be taken to break this inertia.

Rajiv Kumar said that the government should make every effort to remove the apprehensions of the private sector.

He said, "Everything has changed after demonetisation, GST and IBC (bankruptcy law). Earlier 35% of cash used to be available, it has reduced considerably now. Due to all these reasons the situation has become very complicated."

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India's economy has grown at the slowest pace in the last five years. This is clear from recent figures released by the Government of India.

These reports show that the figures could be a problem for Narendra Modi, the second time Prime Minister became a troublemaker.

Economic growth in the last financial year April 2018 to March 2019 is 6.8%. At the same time, from January to March, the rate remained only 5.8%. This rate has been behind China's growth rate for the first time in the last two years.

This means that India is no longer the fastest growing economy. It will prove to be a major challenge for India's finance minister Nirmala Sitharaman. Nirmala Sitharaman has taken over the ministry of Commerce and Defense in the first tenure of the Modi government.

The current challenge to the Modi government is that they can bring back the confidence of the people towards the economy. The Modi government has to reconcile between its Short Term and Long Term Policy.

The government's first challenge will be employment.

The Modi government was surrounded by the issue of the highest employment during its first term. According to the government report, unemployment during the year 2017-18 is the highest in the 45 years.
The experts believe that the government needs to focus on labor-sector such as building construction and textile industry so that employment can be created with immediate effect. Apart from this, the government should also work on industries like health care to enable long-term jobs to be created.

Curved export also creates a major hindrance in the way of employment.

The US has ended India's special trade status since June 5, 2019. India exports 16 percent of India's total exports. In such a way, India's economy will have a bad effect. This will increase unemployment.

The United States has banned Iran from May 1, 2019. India can not import petroleum from Iran now India used to import most petroleum from Iran, which was used by India in its currency. India has been trapped in big trouble due to restrictions on Iran. India will now have to pay in dollars for petroleum. Rupee is at 69.58 level compared to the same dollar. Rupee and will fall below. This will increase inflation.

At the new GDP rate, it is clear that India's economy is rapidly falling below.

The biggest factor in China's economic growth of India is the domestic consumption here. Domestic consumption has played the most important role in increasing the economy for the past 15 years. But with recent data, it is clear that the ability of consumers to buy has decreased.

Sales of cars-SUVs have reached the lowest point of last seven years. Sales of tractors, motorcycles and scooters have also declined. The demand for borrowing from the bank has also increased rapidly. In the recent quarters, the income growth of Hindustan Unilever has also come down. Given these facts, it can be understood that the purchasing power of the consumer has come down.

The BJP promised in its manifesto that it would cut income taxes to ensure more cash and more purchasing power in the hands of the middle income families.

Gaurang Shetty, Vice President of a brokerage company believes that the government should also cut personal and corporate tax in its next budget (July).

They say that these steps will work as a stimulant for the economy.

But the difference between India's 3.4% budget deficit, i.e. government expenditure and revenue, can prevent Modi government from doing so.

Experts believe that increasing financial losses can stop short and long term growth.

The growing agricultural crisis in India was one of the biggest challenges of Narendra Modi for his first term. Farmers from all over the country, including Delhi-Mumbai, have come to the streets demanding a fair price for their crops on many roads in India.

The BJP had decided to give 6,000 rupees annually to select farmers in its first government, although the Modi government has implemented this scheme for all farmers in the first Cabinet meeting of its second term.

This plan will provide relief for some time, but this will not work in a long time. There is a need to improve the structure of the agricultural sector.

At present, farmers sell their crops to state government agencies. Whereas farmers should be able to bargain directly in the market.

One of the BJP's election promises was that it would spend 1.44 trillion dollars on railways, roads and infrastructure. But where will such a huge amount come from? Knowledgeable believe that Modi can take the path of privatization for it.

In his first tenure, Modi has worked slow on his promises to sell government enterprises. Air India has long been in debt. The government started the process of selling its shares, but no buyer was found and Air India could not be sold.

Private investment has been lagging behind for the past few years and in the last decade, India's impressive economic growth is largely on government spending.

In his first government, Narendra Modi made a few reductions in the licensing rule, with the help of which India was able to reach the 77th position in the World Bank's mercantile list, which was 134th in the year 2014.

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