Year-Ender 2019 on Indian Economy: 5 Key Decisions Taken by Nirmala Sitharaman to Fix The Plunging Economy This Year

Union Finance Minister Nirmala Sitharaman and economic crisis in India. (Photo Credit: File)

The year of 2019 has been a roller-coaster ride for Finance Minister Nirmala Sithraman, who was recently named the World’s 34th Most Powerful Woman by Forbes. The Jawaharlal Nehru University (JNU) alumnus received the opportunity to serve the people of India by taking charge of Finance Ministry, which is still struggling to bring back the lost momentum of once the world’s fastest-growing economy.

Since taking charge in June 2019, after Prime Minister Narendra Modi-led BJP clinched the power again at Centre, Sitharaman has been working tirelessly to stabilise the plunging Indian economy. In last three quarters, the GDP growth rate of the country slipped from 7.3 percent in January 2019 to 4.5 percent in September 2019. Though the crisis in the auto to retail sector has concerned every citizen of the country, Sitharaman had kept her feet intact in the slipping financial mud. Nirmala Sitharaman Announces Measures to Boost Indian Economy Amid Slowdown, Rolls Back Surcharge on FPIs, Removes Angel Tax on Start-Ups; Check Full List of Announcements

Ranging from decisions like decreasing cess for foreign portfolio investors (FPI) to merging 27 banks into 12, Sitharaman had taken harsh steps which could possibly help bring back the trailing economy on track again. Though little improvements have been achieved as of yet, the Union Finance Ministry team under her guidance is improving every policy for sailing the Indian financial ship in troubled waters.

Five Key Decisions Taken by Nirmala Sitharaman in 2019

1) Getting approval for transfer of Rs 1.76 lakh crore surplus reserve from RBI: Among the first major achievement under Sitharaman’s name is the approval of transfer of Rs 1.76 lakh crore surplus reserve from RBI to the Central government’s accounts in August, 2019. Though RBI decided to approve the fund after following recommendations of the Bimal Jalan-led expert committee, the credit goes to Union Finance Minister to some extent. Union Budget 2020-21: Nirmala Sitharaman May Forgo 15% Corporate Cess on FPI, Cut in Tax Rates For Individual Taxpayers Under Consideration.

2) Foreign Direct Investment (FDI) push to make India 5 trillion dollar economy by 2024: Sitharaman’s next achievement this year is the FDI push to achieve a target of fiscal deficit of 3.3 percent by FY20. Through this, she advocated FDI in MSMEs, Central Public Sector Enterprises (CPSEs), PSUs, insurance intermediaries, aviation, NRI investment, among others.

3) Foregoing surcharge on FPI: A landmark decision taken by the Union FM is the foregoing enhance surcharge on FPI and along with this, foregoing surcharge on domestic investors in equity. Apart from this, upfront release of Rs 70,000 crore with additional lending and liquidity to the tune of Rs 5 lakh crore by providing upfront Capital to PSBs, was a noteworthy decision. GST Rates Revised: Hotel Stays Become Cheaper, Caffeinated Drinks Get Costlier; Here’s The Complete List of New Tax Rates Announced by Nirmala Sitharaman After GST Council Meet in Goa.

4) Slashing Corporate Tax Rate (CTR) from 30 percent to 22 percent: In order to bring back the economy on track, Sitharaman had announced that the government would reduce the CTR on domestic companies from 30 percent to 22 percent. Also, the FM announced reduction on minimum alternate tax (MAT) for domestic companies by 3.5 percent, making it just 15 percent. With this, the tax rate for new domestic manufacturing companies will be 15 percent, which is also under consideration of being foregone in upcoming Union Budget 2020-21.

5) Bank Mergers: Apart from taking tough decisions, one of the most controversial decisions taken by Sitharaman in 2019 was merging 10 public sector banks into four bigger entities. The FM was of the opinion that it would enhance the lending capacity of banks and strengthen the economy. After the mergers, the country will have 12 public sector banks — a number, which was at one point 27. Union Budget 2019 Key Highlights: Nirmala Sitharaman’s Maiden Budget Advocates Push for Agrarian Sector, Women Empowerment & Education; Here’s the Full List.

Despite taking several other steps to tone down the economic crisis in India, Sitharaman had to face numerous opposition and dissent from financial analysts and opposition parties. There were even speculations that Union Minister Piyush Goyal could replace her in the coming months, however, there have been no indications from the Centre about replacement of Nirmala Sitharaman. Hope 2020 would be a little less tough on her and she would be successful in managing the almost sinking financial ship of India.

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