The government may soon take decisions to give momentum to the stock market and economy. In this, surcharge on FPI can be removed. Know here and what steps can be taken.
New Delhi: The Reserve Bank has reduced the GDP target for the current financial year. The auto sector is in a shambles and the stock market continues to decline.
Finance Minister Nirmala Sitharaman met the banks sometime back. Yesterday he met with representatives of the auto sector. Today many corporate legends also met the Finance Minister.
After this came the news that the government can take many big decisions regarding the stock market. According to ET Now, the government may withdraw the surcharge for foreign portfolio investors. Apart from this, the long-term capital gains tax, which comes after a holding period of 3 years, can also be withdrawn.
Apart from this, some exemption can also be given in dividend distribution tax. The stock market gained momentum after the news. Sensex gained 634 points, Nifty also managed to close above 11 thousand. However, sources said the surcharge for the rich will continue. The government can withdraw the termination through surcharge notification or ordinance on FPI. If the government brings the ordinance, then parliament’s approval will be required.
The Finance Ministry has taken this decision after meeting the PMO. According to the report, it will result in a loss of only Rs 400 crore. It will be decided after the proposal of the Law Ministry.
According to another ET Now news, the government is working on the Confidence Booster package for the stock market. It may decide on long term capital gains tax. It was placed in the 2018 budget.
In the budget, the government imposed a surcharge on the rich, under which FPIs also came. Since then FPI started selling in the stock market. The market cap of BSE was Rs 151.35 lakh crore on the budget day, which has now come down to 138.82 lakh crore. It decreased by 12.53 lakh crores.
Most of the selling was done by foreign institutional investors. Since July 1, the FPI has sold 20 thousand crore rupees by the stock market. Earlier, the Reserve Bank had cut the repo rate by 0.35 per cent on Wednesday. This is expected to make loan rates cheaper, which will increase demand.