Economists call for more reforms
Finance Minister Nirmala Sitharaman has discussed with the Financial Sector and Capital Markets’ stakeholders issues relating to the banks, NBFCs, and Alternative Investment Funds (AIFs) among others during a Pre-Budget Consultations Meeting in New Delhi.
The Stakeholders have submitted several suggestions to the Minister concerning infusion of capital in niche and regional banks, enhanced role of Financial Sector Development Council, issues related to the NBFC Sector, the need to distinguish between solvency, governance & liquidity issues.
The Pre-Budget Consultation Meeting was held with the stakeholders on 13 June 2019.
Also suggested was the need for creation of dedicated liquidity window for NBFC sector, review of interest rates on Government’s Small Savings Schemes, review of banking NPAs provisions through setting-up a Committee and enhancing financial literacy programmes and funding.
The suggestion listed included incentivising agricultural marketing, setting-up of Debt Exchange Traded Fund, domestic capability building in Audit & Credit Rating, making available trade licence online for MSME sector, provision to ease liquidity pressures created due to insolvency, rationalisation of various taxes like Security Transaction Tax (STT) in capital market, setting-up of a separate bond exchange, allowing banks to invest in InvITs to access broader market and make Corporate Tax progressive to incentivise MSME Sector among others.
Separately, the Minister has discussed with leading Economists ways of boosting Economic Growth, Job Oriented Growth, increased Macro-economic Stability, Fiscal Management including ideal size of Public Sector Borrowing requirements and increase in investments among others.
The Economists have put forward their view that 2019-20 Budget should set the tone for the next five years and is a unique opportunity to promote manufacturing through Make in India.
Various other suggestions received from Economists were related to tariff reforms, removing bottlenecks in supply-chain, EXIM policy for agriculture, removal of specific duties on textiles, maintaining fiscal consolidation, revival of Inter-State Councils for holistic domestic growth, boosting employment by focusing on skilling and giving fillip to services and manufacturing sector, macroeconomic stabilisation and structural reforms for long-term growth, stability of tax rates, reduction of tariffs.
The Economists also want further simplification of GST and implementation of Direct Tax Code, promoting labour intensive sectors, constitution of independent fiscal policy committee, incentivising digital transactions, focusing on job-oriented growth, Insolvency & Bankruptcy Code (IBC) type framework for NBFCs sector, infusing capital in banks and tapping into e-commerce’s potential for job growth among others. fiinews.com
