Measures announced by govt to revive economy showing signs of 'deep slowdown': India Inc

India Inc on Friday cheered the slew of measures announced by the government encompassing a broad range of sectors and said the impactful interventions will shore up confidence and revive the animal spirits in the economy that had started showing signs of a 'deep slowdown'.

Addressing a press conference here, Finance Minister Nirmala Sitharaman said all pending GST refunds to micro, small and medium enterprisies (MSMEs) till date shall be paid within 30 days, while future refund matters will be sorted out within 60 days.

She also said that all old tax notices will be decided by October 1 or will be uploaded again through the centralised system.

The finance minister also announced withdrawal of enhanced surcharge levied on FPIs, restoring the pre-Budget position.

"The most important announcement was the removal of the surcharge on FPI & DI profits. Because this was strong evidence of a listening capacity&the humility to course-correct. More than anything else, that should regenerate spirits," Mahindra Group Chairman Anand Mahindra tweeted.

He added that holding a press conference and announcing a slew of measures instead of a 'trickle of tweaks' was smart communication.

It garnered global attention and signalled government's recognition of the gravity of the situation and an intent to reignite sentiment and growth, he said.

CII Director General Chandrajit Banerjee said the "excellent package" would help the economy to leapfrog to the next level.

The government also allowed an additional 15 per cent depreciation on vehicles acquired from now till March 2020 and said it will come out with a scrappage policy for old vehicles.

It also said CSR rule violations will only be treated as civil matter and not as criminal matter.

"While the increased depreciation from 15 per cent to 30 per cent and deferment of increased registration fees till June 2020 will have a positive impact, moderation of GST base rate from 28 per cent to 18 per cent for all categories as being requested by the auto industry for sometime now would have been the real demand stimulant!," Jaguar Land Rover India Limited President and MD Rohit Suri said.

Assocham President B K Goenka said it is clear that the government is concerned with current economic situation and added that the industry will respond very enthusiastically to these praiseworthy moves.

Ficci President Sandip Somany said the measures will give a major boost to the economy that had started showing signs of a deep slowdown. As these measures take effect, we are sure that these will lift the confidence of businesses and investors alike, he added.

"We thank FM Smt. @nsitharaman Ji for announcing key measures which will give a boost to demand, industrial activity&overall growth of the Indian economy. Eagerly waiting for the Housing industry announcements," CREDAI Chairman Jaxay Shah tweeted.

PNB Housing Finance Managing Director Sanjaya Gupta said the measures will support growth and ease liquidity crunch in the housing finance sector.

Economists and experts too said the announcements made by the government will have a positive impact on the economy.

MS Mani, Partner at Deloitte India said expediting GST refunds would significantly benefit businesses having refunds in improving their working capital in the short term.

"Removal of angel tax will go a long way in building trust and confidence in the startups and the investors, and shows government's resolve towards ease of doing business in India and encourage entrepreneurship," Vikas Vasal, Partner & National Leader Tax, Grant Thornton India LLP said.

"The slacking economy and the slump in various sectors including automobiles, housing and MSMEs was a grave concern not just for industry stakeholders but also for the government.

"In a major boost to the slowing economy that comes literally in the nick of time, the FM today has hit a sixer with a slew of announcements for the banking and financial sector including NBFCs, HFCs and even MSMEs," ANAROCK Property Consultants Chairman Anuj Puri said.

"The removal of higher surcharge on capital gains will not apply to AIFs which deal in derivative securities where the characterisation of income is business income," Bhavin Shah, Partner & Leader, FS Tax, PwC India said.