Six Budget steps that Arun Jaitley thinks will stimulate growth

NEW DELHI: Though demonetisation-hit India was expecting Finance Minister Arun Jaitley to inject a big stimulus into the economy, Budget 2017 has little to offer by way of a stimulus. Yet there are several proposals which the government thinks will promote growth.

Below are six of growth-boosting measures in Budget 2017:

1. Concessional withholding rate of 5% charged on interest earned by foreign entities in external commercial borrowings or in bonds and government securities is extended to 30.6.2020. This benefit is also extended to Rupee Denominated (Masala) Bonds.

2. For the purpose of carry forward of losses in respect of start-ups, the condition of continuous holding of 51% of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues. Also the profit (linked deduction) exemption available to the start-ups for three years out of five years is changed to three years out of seven.

3. MAT credit is allowed to be carried forward up to a period of 15 years instead of 10 years at present.

4. In order to make MSME companies more viable, income tax for companies with annual turnover upto Rs. 50 crore is reduced to 25%

5. Allowable provision for non-performing assetds of banks increased from 7.5% to 8.5%. Interest taxable on actual receipt instead of accrual basis in
respect of NPA accounts of all non-scheduled cooperative banks also to be treated at par with scheduled banks.

6. Basic customs duty on LNG reduced from 5% to 2.5%.