Weekly Wrapup: Reforms Galore
Usually, we do a weekly wrapup on Saturdays. But today, we thought we would do something a bit different — Tie some loose ends on the “Atmanirbhar” presentation and give you additional context. However, this isn’t going to be a new story. Instead, we will collate articles we’ve already written in the past (that are relevant) and offer some extra context on the reform measures.
So let's get started.
On the Power Industry
In a bid to alleviate problems plaguing the power industry, the government promised to offer state discoms loans at concessional rates to help clear their dues. They’ve set aside 90,000 crores to make this happen. But if you don’t understand how discoms work or if you’re still trying to figure out why they need help, here's an article just for you — Power Trouble
On RBI and Operation TLTRO
Something else that the government has been touting often is how the RBI is trying to ensure banks and corporates have access to cheap loans. And there’s one particular term that’s been popping up in many presentations — TLTRO
So if you’re looking for an explainer trying to understand TLTRO and RBI’s role in this whole scheme here’s a couple of stories that should help you out
On NBFCs
There was also talk of helping Non-Banking Financial Companies (NBFCs) during these stressful times. It's another story we covered very recently and hopefully, this explainer should answer some of your burning questions — The NBFC Rescue Plan
On Income Tax
Okay, don’t get your hopes up. The government hasn’t cut income tax rates. At least not yet. Instead what they’ve done is reduce TDS/TCS rates by about 25% (for non-salaried payments). Meaning the tax deducted (at source) on the gains you make on your fixed deposit will be taxed at a rate that's 25% lower than usual.
However, you’ll still have to pay this extra 25% when you file taxes next year. The only benefit here is that you’ll have more money to spend right now.
But what if the government marched ahead and did cut rates. It’s a nice thought experiment. So here’s a story from January (when many people were expecting the government to cut income tax rates) to help you understand the tradeoffs — To cut Income tax or not to cut Income Tax.
Anyway, that’s 4 stories already and we don’t want to burden you with more material. So we will leave you to it.
Also if you've missed reading our explainers on the economic package, here's a tentative 2 part series (part 1, part 2) breaking down the finance ministry's complex presentations.