Recommendations to Covid19 Economic Response Task Force

Sl No	Recommendation	Remarks / Justification / Explanation
1.	No tax on Dividends from Shares & MFs for people above 60	This is a must,  as persons above 60, of whom almost 90 % are retired persons,  have only this and FDs as source of income.  The withdrawal of Tax Exemptions on Dividends as well as the Rs. 50K FD interest tax exemption withdrawal has dealt a severe blow to them and also pushes them onto huge amount of paper work that will require auditor assistance and expense. This move will make the Govt. immensely popular & responsive ;  will win you huge plaudits & also give significant relief to the Sr Citizens
2.	The Limit for Professionals to register for GST is raised from the current Limit of Rs. 20 Lakhs to Rs. 40 lakhs,  to bring it in line with other businesses.	The low limit of  Rs. 20 lakhs is pushing a large number of Professionals to compulsorily register for GST  with the whole paraphernalia of Filing Returns, Keeping Records, paying additional Fees to the Auditor  which his size of operation cannot afford.  Besides by not registering, it will actually favourable impact Government Revenue as these Professionals will not be able to claim any Input Credit against GST paid by them, Further,  it brings about a kind of symmetry with other "non-professional"  business which has a threshold limit of Rs. 40 lakhs, only  above which GST registrations is compulsory.

Sl No	Recommendation	Remarks / Justification / Explanation
3.	BASIC IT Exemption Limit to be raised to Rs.. 7.5 lakhs for people above 60 and to Rs. 10 lakhs for people above 80	Earlier Basic Exemption Limit was Below 60 years               – 2.5 Lakhs Above 60 but below 80   – 3.0 Lakhs   (i.e. 20 % more than 1st Slab) Above 80 years                        – 5.0 Lakhs   (i.e. 100 % more than 1st Slab)    This suggestion is to make the same parity, as before CURRENT (recommended) Below  60 years              - Rs. 5 lakhs Above 60, but below 80  - Rs. 6 lakhs (i.e. 20 % more than 1st Slab) Above 80 years               - Rs. 10 lakhs (i.e. 100 % more than 1st Slab)    This move will assuage a lot of the anger and disappointment that has come from the Budget Proposals as the increase of Basic Limit to Rs. 5 lakhs does not adequately compensate for the withdrawal of commonly availed deductions like HRA, LTA, Sec 80 C, Shares & MF Dividends, FD Interest  Exemption of  50K.  In case of persons above 80 years they were already enjoying exemption of Rs. 5 lakhs. Of course,  there is a cost,  but it will greatly mollify the salaried class and Senior Citizens who are an important voting bloc and also very influential in their own ways. Some realpolitik has therefore to be resorted to in this case.

Sl No	Recommendation	Remarks / Justification / Explanation
4.	For all those buying subsidized LPG Cylinders,  they will get a discount of  Rs. 100/- per cylinder for a maximum of 12 cylinders during the period from April 2020 to March 2021. Thereafter,  prices will be charged as per pricing formula currently being used.	This will show your sensitivity to the lower income group and shield you from accusations that you do not care for the poor and the less privileged.  Besides, this facility is meant to be operable only for 1 year and therefore has a limited life and limited “revenue-damage”  potential
5.	Farmers will be given Seeds as Loan from National Seed Bank to be repaid within 3 months after harvesting in a maximum of 3 instalments without charging any interest.	This will be warmly greeted by the farming community and show /prove your credentials that you are sensitive to the farmer’s needs which is one of your declared priorities.
6.	All Sugar Cane Farmer dues will be cleared by all concerned State governments within next 90 days.	This will be also be warmly greeted by the SUGAR farming community and, once again,  show / prove your credentials.
7.	Kisan Samman amounts to be raised by 25 % from present Rs. 6000 to Rs. 7500/-,  each instalment now becoming  Rs. 2500/-	Once again, this will be very warmly welcomed by the entire farming community in the country and put tremendous pressure on “absentee” States to join the scheme.
8.	Advance payment of  50 % of  Next Kisan Samman Yojana -  yes, by printing money,  if necessary.	This gesture and support is absolutely essential to recognise the plight and difficulty of Farmers.

  

Sl No	Recommendation	Remarks / Justification / Explanation
9.	All exporter’s duty drawback,  and incentive amounts due as on March 31, 2020, as assessed by the Government,  will be paid by 31st May 2020 at the latest.	There has been continuous complaint about this and the exporters earning valuable foreign exchange for the country feel very cheated when they are denied their legally due benefits.  This measure will make them very re-assured and win you strong supporters.
10.	All approved IT Refunds remaining unpaid as on 31 Mar 2020  will be paid by  30th  April 2020.	This will greatly improve cash flow for the ordinary citizen and thus inject liquidity in the entire economic system, leading hopefully to greater demand and purchases.
11.	All Loans above Rs. 20 Crores given up to and including 31st March 2019  and not having more than one delayed payment every year up to a maximum of  5 such delayed payments in ALL, till  date,  will get a rebate of 1 Monthly instalment for the month of April 2020 for improving current cash flow.	This will free Corporates from Cash Flow difficulties and give them a breather till things turnaround, business picks up and their normal cash Inflow  begins.
12.	For loans below 20 crores,  rebate of  1.5 Monthly instalments for April & May 2020.	Same argument and expected benefits for smaller companies
13.	For loans  below  1 crore,  rebate of  2 Monthly installments  for April & May 2020	Same argument and benefits for individuals,  who will  all, most probably,  fall in this bracket.
	NOTE	While Recommendations 11, 12 & 13  will essentially apply to PSBs, RBI & Government can nudge the Pvt. Sector & Co-operative Banks to also implement the same concessions.

  

Sl No	Recommendation	Remarks / Justification / Explanation
14.	LTCG Tax on shares & MFs to be scrapped and instead the Long-term period to be raised to 3 years form current 1 year.	This must be done – the LTCG earnings are a pittance compared to the complicated calculations and cost of “Auditor help”  that even an individual has to take. By raising the Long-term period definition to 3 years,  the Government will very effectively meet its basic objective of preventing sudden and quick upheavals in the Capital market. And if anybody wants to exit earlier,  then, of course let them pay applicable Income tax, bereft of any concessions on account of capital gains.
15.	For Next 12 months,  all existing Housing Loans from PSU Banks to charge 2 % Less interest  and all new Loans for a repayment period not exceeding 15 years to get a 2 % interest subvention.	While this may appear to be a huge cut in income of banks,  actually it is a very nominal cost to pay for making life easy for the common man for a limited period of only 1 year. It’s psychological impact will,  however, be tremendous. The same facility for new loans will hopefully encourage new house purchase which should kick-start many other segments of the economy like furniture, domestic appliances, textiles, lighting, plumbing and so on.

  

Sl No	Recommendation	Remarks / Justification / Explanation
16.	For all discounts offered by the builder exceeding 15 % on published prices of Houses as on 1 March 2020,  50 % of the discount amount will be Tax exempt.  This is to encourage builders holding unsold inventory to dispose of current stock at a discount and thus pay back their loans to the banks and thereby put money into circulation.  This will be valid for period of 12 months from 1 April 2020 to 31 March 2021.  The discount given will be added back to income if during the pendency of the payment the builders raise the prices on one pretext or the other.  This will not apply to Projects announced after 1st March 2020.	This move is to encourage Builders to stop hoarding, simply because of their “staying power” or “collusion with banks”  and  will help to reduce existing stock that is simply lying idle. This will tremendously help the Bank’s cash flow as builders will now be in a position to service their loans much better, which will have it’s own cascading beneficial effects on the economy.
17.	Toll on Highways will be reduced to 50 % for all Trucks and tempos for a period of 3 months starting from 1st April 2020 till 30th June 2020.	This is a industry friendly gesture in these times of earning difficulty and reduction.  In any case, it is proposed only for a limited period of 3 months till  30 June 2020.
18.	All Taxi & Auto Drivers will be given 50 % rebate on RTO Fees as well as on “Vehicle Passing Fees” for the year April 2020 to March 31, 2021.	This is to acknowledge the very hard hit the taxi/auto plying driers have taken because of loss of business.

  

Sl No	Recommendation	Remarks / Justification / Explanation
19.	Ask Industrialists & Business Houses to donate to CORONA Relief Fund	While it is really up to the Industrialist / Business Housed to decide the amount, hint to them that Rs. 100 Crores donation per Company  is expected from the Top 500  such Cos/ Biz  Houses including PSUs.  This can also come out from their unspent CSR Funds.
20.	Ask BCCI & IPL to donate Rs. 100 Crores each
21.	Ask Film, Singers/ performing Artistes and leading Sportspersons to donate to CORONA Relief Fund.
22.	Get BJP to donate 100 Crores to Corona Relief Fund and ask other parties to give what they can.
23.	Use this fund to direct transfer to all those holding Jan Dhan Acct - 250/- per week for 1 Month (Rs. 35,000/- Crores) & extend by another month if economy still remains at standstill.	This is a sizeable expense and will have to financed by deficit.  However, it is essential given the circumstances.  Will also greatly upgrade usefulness of “JAN DHAN ACCOUNTS”
24.	Ask all B & C Grade Restaurants to give discount  of  20 % on every  Bill to Customers for 2 Months Only (i.e. Apr & May 2020) &  Govt shouldn’t   collect 5 % GST from them, even though it is charged. This means an  effective discount of 15 % only.	Will help the huge number of people who eat out daily.  But this is a temporary relief for 2  months  only  - April & May 2020,  to tide over the present crises.

hemendra k. varma
mumbai
24 March 2020