Govt. Responds To Downturn With Steps To Boost Growth

• Controversial surcharge on Foreign Portfolio Investors withdrawn\
• But increased surcharge will apply to those earning over 2 crore a year
• Violations of CSR rules will not be treated as criminal offences
• Govt. will front-load 70,000 crore of capital infusion in public banks

The government on Friday came out on the front foot to try to boost private sector sentiments, with Finance Minister Nirmala Sitharaman announcing a slew of measures to reduce the burden on the sector, including withdrawing the controversial surcharge on Foreign Portfolio Investors (FPIs) and reiterating the Prime Minister’s statement that the government “respects all wealth creators”.

Ms. Sitharaman told a press conference that the government would not treat corporate social responsibility violations as criminal offences, as it had earlier said.

“In order to encourage investment in the capital market, it has been decided to withdraw the enhanced surcharge levied by the Finance (No 2) Act, 2019, on long- and short-term capital gains arising from the transfer of equity shares,” the Minister announced. “In other words, the enhanced surcharge on FPIs goes and the pre-Budget position is restored.”

She, however, clarified that the increased surcharge announced in the Budget would still apply to high networth individuals earning more than 2 crore a year. This, she said, would be the case till India’s 75th Independence Day, when the deci sion would be reviewed.