Key Highlights: Finance Ministry’s First Economy Booster Package

Mantra: Increasing cash flow and energizing markets

Automotive Sector

  • Vehicles registered by March 2020 will be allowed to retain their registration
  • An additional depreciation of 15% (total depreciation allowed increased to 30%) will be applicable for all vehicles purchased before March 2020
  • Government departments will be actively told to replace their old vehicles with new ones
  • Government will actively consider a scrappage policy for older vehicles but is limited by a lack of infrastructure at this time

Capital Markets

  • Enhanced surcharge on FPI & domestic investors no longer applicable; pre-budget position restored. Loss to exchequer to the tune of Rs. 1,400 crores.
  • Additional credit expansion for public sector banks, FM releases upfront Rs. 70,000 crores which will lead to additional systemic capital expansion of Rs. 5 lakh crores
  • All banks have decided to pass any rate cut through MCLR to end customers
  • All banks have agreed to directly link repo rates with interest rates
  • Banks will return security related documents to customers within 15 days of the closure of the respective loan
  • Online tracking of loan application (all types of facilities) will be available to borrowers– improving turnaround time
  • Honest decision making in banks to be promoted through identification of accounts under vigilance
  • Additional liquidity support for Housing Finance Companies (HFCs) of Rs. 10,000 crores (taking it to Rs. 30, 000 crores) from the current Rs. 20,000 crores
  • Focus on partial credit guarantee scheme, quick pooling of assets and liquidity provision to NBFCs
  • NBFC can use Aadhar related KYC for loan processing so that the process is not repeated
  • Co-origination of banks will also apply to NBFCs as well so that synergy between the two is heightened and the systemic excess liquidity utilized properly.
  • More on Credit default swaps market to follow
  • RBI will be supporting bond issuances and price discovery
  • Depositary Receipt Scheme: ADR and GDR financing for Indian firms
  • Aadhar to be KYC for mutual fund investments and Demat accounts
  • Offshore rupee market will be brought to domestic market and FM/ RBI will allow Rupee-USD derivatives trade at GIFT Special Economic Zone. More details to follow.


  • Section 56 (2b), Angel Tax will not be applicable for registered startups
  • A member of Central Board Direct Taxation (CBDT) will head a cell for quick resolution of problems faced by registered startups
  • Banks to have one-time settlement provisions for MSMEs
  • All pending GST refunds pertaining to MSMEs will be paid within 30 days
  • Every GST related refund in the future will be cleared within 60 days for MSMEs
  • Recommendations of the UK Sinha Committee have been adopted for MSMEs


  • An organization to provide credit enhancement for providing infrastructure and other housing projects. Name of the institution revealed soon.
  • Delayed payment from Government departments and CPSCs to the infrastructure related vendors/ contractors will be monitored and payments expedited
  • Inter-ministerial task force set-up for the envisioned Rs. 100 lakh crore investment in infrastructure as it is critical for the eco-system
  • Central Tax Revenue targets are official and are fully attainable. No revision on this end.