How Finance Bill is Bringing Changes in the Economy

Adverse impacts of the COVID-19 outbreak are visible across the globe. Business operations have slowed down and eventually, ceased in various economies, including India. As a result, the world economy is tailspinning and reaching a saturation point. Pertaining to this, entrepreneurs are facing huge losses, which have been calibrated as irrecoverable. In this hour of need, when the economies are shrinking and businesses are grappling to keep themselves afloat, an external aid is required. 

To stabilise businesses, governments of many countries are coming forward and lending its hand to the affected businesses. In the similar vein, the Indian government is stepping up and implementing strategies, over cautionary measures that it is taking. Recently, the government has released a Finance Bill, which was led by Finance Minister, Nirmala Sitharaman. 

The Lok Sabha, which is the lower house of the country’s bicameral Parliament, has recently cleared the Finance Bill 2020. The Bill was passed along with amendments as political groups decided to clear the central government-drafted financial and tax proposal for fiscal 2020-21 without any discourse, reported Mint. 

Benefits Under Finance Bill 

Under the Finance Bill, the Indian government introduces a more increasing personal income tax rate for individuals who do not avail any tax incentives. Furthermore, the government increased the option of a 15 per cent corporate tax without tax incentives for electricity producers and imposed levy on dividends in the hands of the recipient, according to the cited report.  

The companies formerly had to pay out 15 per cent dividend distribution tax. The latest bill also had a proposition pertaining to tax residence which raised the fear that various non-resident Indians will bear an adverse impact. In the parliament meet, the Modi-led government has reassured that the provision in the Finance Bill will be altered. More precious details of the amendments which have been added in the Bill are awaited.

Financial Package Deferred

In the parliament meet, the Modi government did not put forward any proposal of the financial package. The opposition parties asked Finance Minister, Nirmala Sitharaman to proclaim the government’s response to their demand for a financial package to deal with the coronavirus impact on businesses and livelihoods.

To calm the opposition parties, Speaker Om Birla told members that he had met floor leaders earlier in the day to thrash out an agreement on clearing the Bill without delay. 

“I have met leaders of the floor. All leaders, keeping in mind the country’s current situation, have agreed to pass the Finance Bill without discussion," the Speaker told the Lok Sabha House.