Areas They Ignored In 20 Lac Cr. Economic Package Announced
Areas They Ignored In 20 Lac Cr. Economic Package Announced
In 5 days long announcements for reforms & reliefs to the Indian Economy, There are some really good announcements. Like, 1 nation 1 ration card, Affordable rental housing under PMAY through PPP model, Rs. 5000 cr credit facility for street vendors, Extension of housing loan subsidy on the affordable residential house for MIG worth Rs. 70000 cr till 31.03.21, Rs. 3500 cr worth free food grains to 8 cr migrants for 2 months, Garib Kalyan Yojana, Global tenders to be disallowed below Rs. 200 crore etc.
However, the simmering hope was also dashed when 5-days long ‘Atmanirbhar’ economic packages announcement were over. It became clear that it did not intend to primarily address the concerns surrounding the unprecedented crisis happening in the business community, especially Small & Medium ones.
Businessmen are incurring huge Fixed costs like Rent, Salary, EMI etc.. Of course FM cannot provide relief for that. But they could have waived INTEREST cost in TAX laws at least and a lot of other measures could have been brought… But sadly NO..still nothing done. as I understand only Tax laws. I believe, there can be So many actual Measures in different fields… Mind well, Nobody asking for Freebies.
Here I have noted down areas they ignored which are related to Businessman. More particularly, I have concerns why the 5 days long Netflix series has no announcement regarding Businessman except 3 lac cr credit guarantee line. We lost a great opportunity to uplift Indian Businessman over the crisis.
Areas They Ignored
In the times of lockdown, The Businesses are closed since March… It is being two months… There is no relief. Businessmen are incurring huge Fixed costs like Rent, Salary, EMI, etc. What they avoided or ignored is a relief to business class that runs the country. Some persisting & unavoidable expectations of the stakeholders include:-
1. Lowering Interest Rates of TL & WC loans for FY 20-21 –
Lowering Interest rates for Primary sector loans as a benefit. Specially, The newly incorporated industrial units are having huge losses in the first 5 years. The government should lower Interest rates for these units. This will help them to get back into feet sooner. You have given your guarantee to new loans. But what about existing loans. ? Think. Please reduce the Interest rates for time –being. Why charge 9 to 12%? Why cant it be reduced to 6%?
2. Reduction in Petrol, Diesel Rates
Brent crude prices, the international benchmark, fell to a historic low of $16 per barrel in April. It has fallen 39% so far in the month. Petrol prices in India, meanwhile, have remained at Rs 76.31 ($1) a liter (in Mumbai) in April. Diesel prices in the city, too, were unchanged at Rs 66.21 ($0.87). If Govt reduced the petrol & diesel price then there would have great benefit would have been given to all from rich to poor. It can bring down a lot of Transportation costs. It can certainly reduce production costs. More importantly, It will be a true Relief to Middle class who is barely surviving in 2 months close down.
3. Lowering Electricity Bills
Lowering Electric city bills for all for FY 20-21 will lead to a huge reduction in the cost of production. That can compensate for the huge fixed costs expenses that happened in the lock-down period when there is no business. Imagine it bill give a huge boom to an Indian manufacturer. Our products will be able to complete the Foreign especially china’s costs. Many young entrepreneurs will come. There are schemes for the Subsidy of Electricity city bills. But the Government should give blanket benefits to ALL manufacturers.
4. Waiver of Penal Interest In Income Tax & GST ..at least till July-2020
“India runs on its Revenue – Mainly Income tax and GST… And Manufacturers/traders contributes these mainly. In the last some years, We have seen that Govt is more & more interested in Penalty, Late Fees, Interest.. in the disguise of TAX collections. They have been charging enormous..( Don’t forget, we are still middle class developing country.. We cannot afford huge late fees, Penalty, interest at all like developed countries or Arab countries )
Allow late payment of TDS & GST Liability without interest at least for the period nation is under lockdown irrespective of turnover. In income tax, There should be at least waiver of Enormous high interest for TDS Payment for March, April, May.. in GST, (those having TO over 5 cr ), There should be a waiver of interest liability on NET GST payable for. March, April, May. Don’t know why this doesn’t qualify to be as Relief.
Extension of due dates, Giving Refund of own money early, Giving collateral guarantee. Are not actual RELIEF. These are part of the mechanism which you could have done earlier… You waited all these years for this pandemic and you realize now?.
The way Govt promoted lowering TDS and 50000 crore liquidity relief provided. Why not talking about Interest liability on delayed payments that you will serve in Notices.
5. GST Amnesty Scheme For Late Fees –
Consider the demand of several taxpayers/professionals to Waive Off Gst Late Fees for the initial 3 years. & refund huge late fees you have collected already for the first 3 years. It will be a huge relief to all those who have paid in Lacs. Certainly, the Compliance ratio will increase.
6. About Industries That Has Highest Impact
Hotel industry, restaurant industry, banquet party plots, theater multiplex owners, Automobile Industry, travel agents, Party plot owners, banquet owners, Airlines, tour package companies, etc, etc. These businesses have huge set-back due to Corona Pandemic. All these industries have an impact on this for the one year they will not have any Business. We don’t have any idea about how they will survive. Rent, Salary, EMI all are fixed costs the same as all other businesses. Much other industry which supplies their goods and services only to above industries how will they survive? what about the worker’s staff which are dependent on the above industry?
The loan package is definitely good for those who are continuing with their manufacturing -trading but what about the above service industry which is about to die? what will be they doing if they will take a loan there is no business till one year.? Why there was no announcement for them?
7. Unemployed Class of People
Earlier, there were 100 people were unemployed out of 1000, Now it is 200. Because many industries have already closed. Many have fired their employees. Why there is no announcement on this. We will see the biggest social-economic disturbance in the coming months. Can Govt undertake more projects on its own to employ these unemployed people?
8. Relief Under Income Tax By Still Reducing New Income Tax Slab Rates Under 115BAC
Right now , New rates have been introduced for AY 21-22. But when we calculate & compare both regimes, Old rates are beneficial at least till 15 lac income. This doesn’t serve the purpose for which New rates have been introduced. If you want people to adopt for New rates, You have to reduce it & compare it with old rates, Right now,
- Above Rs. 2.5 lakh to Rs. 5 lakh → 5%,
- Above Rs. 5 lakh to Rs. 7.5 lakh → 10%,
- Above Rs. 7.5 lakh to Rs. 10 lakh → 15%,
- Above Rs. 10 lakh to Rs. 12.5 lakh →20%,
- Above Rs. 12.5 lakh to Rs. 15 lakh → 25%,
- Above Rs. 15 lakh → 30%.
This should be reduced and replaced as 5%, 7.5%, 10%, 15%, 20%, 30%. This way Middle class will find relief due to reduced Income tax liability.
All these measures put together can provide a lot of ease of doing business & can help the Indian business survive in this crisis situation and also compete globally.
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