The finance minister has been actively making announcements over the past one month to revive the economy.
On Aug. 23, Sitharaman announced the government’s plan to remove the tax surcharge on foreign portfolio investors, pay upfront Rs 70,000 crore for bank recapitalisation, and several other measures to revive the automotive industry.
Again on Aug. 30, she outlined plans to merge 10 public sector banks into four in an effort to better manage capital. She also announced a series of measures for state-run banks hoping that the capital infused by the government would result in stronger banks.
Later, she announced measures to provide relief to the housing sector and boost exports. One such proposal was to set up a special fund to provide last-mile funding to affordable and middle-income housing projects that are stalled due to a liquidity crunch.
Still, the biggest surprise was reducing the effective corporate tax rate for companies that has revived business sentiment and buoyed the equity markets.
Sitharaman also directed state-run banks that no stressed MSME be declared as an NPA at least till March 31, 2020. She has convinced PSU and private banks to join a public outreach programme, in the form of a loan melas in 400 districts, where those in need of credit can come and avail it.
