Impact of Budget Proposals on Financial Services Sector
The Budget and Finance Bill 2020 presented by the Finance Minister in the parliament on 1 February 2020 contains several tax proposals and other announcements impacting financial services sector.
We are pleased to send you the copy of the NEWSFLASH on Impact of Budget Proposals on Financial Services Sector of key changes proposed, most of which are likely to take effect from April 2020.
According to Sunil Gidwani, Partner, Nangia Andersen “The FM made several important announcements containing much needed relief for financial service sector. The RBI data shows that Bank funding to NBFCs has slowed down in pace in the recent past due to problems being faced by some of the large NBFCs as well banks own NPA issue. This has been impacting funds available with NBFCs for lending. NBFC liquidity is one of the key reasons for the economic slowdown in the country. Budget proposal of NABARD refinancing scheme for rural finance will ease liquidity concerns for NBFCs. This will help NBFC sector engaged in tractor and other equipment financing. Measures to strengthen Banks and to increase confidence in the system and to develop debt markets will also go a long way in channelizing savings and capital into investments in various sectors in need of funds. The provision on the lines of demerger have been introduced to ensure that the investors get original holding period as well as proportionate cost for calculation capital gains”.