The push for privatization of Public sector undertakings seems to be going forward with the Atmanirbhar package including it and the recent proposal for letting private players run 151 trains. The Oil Minister also cleared uncertainty by saying that there is no going back with the BPCL privatization process. The LPG era that started with 1991-92 reforms, with this, push, seems to get the biggest push with this clear stance.
With the decreasing revenue and increasing expenditure, the Finance Minister took the fiscal expansion path not just for the current fiscal, but also for the next fiscal. This is despite over 37% reduction in food subsidy and nearly 11% reduction in fertilizer subsidy. The deficit for the current fiscal is to be 3.8% as against 3.3% announced in the last year’s budget. This was done by making use of Section 4(2) of the FRBM Act that provides for the deviation from the estimated fiscal deficit. The government argued that this fiscal path aims for fiscal consolidation without compromising the investment needs from the public funds. This shows that there is a need for a comprehensive investment on the capital front to ensure an increase in the revenue for the government and reform in the FRBM Act to make sure that the targets set by this law are achieved.
In September 2019, the Finance Minister Nirmala Sitharaman had made a deep cut in the corporate tax rate from 30% to 22%. India’s combined effective tax rate was among the highest in the world. After the tax cut, the effective tax rate for all domestic companies has been reduced to 25.17%. India’s base corporate tax, due to this move, is now on par with most Asian countries – increasing its competitiveness in the global market. This move comes in response to the brewing problem of the economic slowdown in the country. The cut in the corporate tax rate was seen as a boon by the corporates in the midst of the growing crisis within the Indian economy.
Government e-Marketplace (GeM), launched in August 2016 by the commerce Ministry is a one-stop portal to facilitate online procurement of Goods & Services which are in common use by various Government Departments / Organizations / PSUs. Its objective is to create an open and transparent procurement platform for government departments.
In the recent Union Budget, the Finance Minister informed that the GeM has clocked the transaction of Rs 40,000 crore. The minister in her 2020-21 Budget speech said that the government aspires to increase the turnover of the GeM portal to Rs 3 lakh crore.
The Finance Minister on August this year had announced a series of measures to boost the economy and the financial market sentiments of the country. Among them was the setting up of a development bank. This comes during the time when there is an increasing call for sustainable development of the economy and the promotion of eco-friendly technologies. This announcement was in response to the economic slowdown and discouraging capital market sentiments. The idea for the establishment of a sound development bank is encouraging as it helps in providing investments on long-term projects that may have little or no profitable returns but are essential for the sustainable development of the country. This move allows for risky investments, the ones that are essential for addressing the environmental concerns, technological growth, and rural economic development.