Abolish Tax Targets

Every corporate entity-from the smallest trader to the largest conglomerate depends on real people, the humans driving it forward. Even the most basic of tasks has to be done by real people. In such a scenario, if a government expects the corporate entities under its jurisdiction to still meet 'tax-targets', it will naturally fall on the shoulders of the people already over-stressed and worried about their own and their family's future, only adding to our worries.

This is the time for hand-holding and support, not 'tax-collection'. Putting up a daunting 'tax-target' of Rs. 13.2 lac crore in a time of ECONOMIC HALT-not just slowdown will create more avenues for corruption, and put tax-terrorism into hyperdrive, 'Hyper tax-terrorism'.

Middle Class Needs Support

India has seen phenomenal growth and development in the past decades. The old stereotypes do not hold water anymore. The recent past of economic upswing uplifted a large portion of our population into the middle class. And the middle class has given back tenfold to the country in the form of taxes-both direct and indirect.

Today in the time of dangerously infectious disease and consequent economic halt-data shows a frightening fall in unemployment. This is the time to utilize our savings. The government now needs to sustain the middle class-a cash support of 5% of the total tax paid by the middle class in the last 5 years could help our country's middle class to not fall back into the BPL (Below Poverty Line) category, and wiping out decades of hard-work and good decisions.

Today without urgently needed government support, we might be witness to a harrowing spectacle of 2 choices-death, either from hunger or suicide; or get a BPL status, which will slash our collective dream and efforts to become a developed country.

As such shaking off the prejudices, the country needs to protect its taxpayers by sacrificing just 5% of the total tax paid by them in last 5 years and provide the amount in 3 monthly instalments as a cash refund to each taxpayer. This single event besides protecting the middle class, might trigger an unprecedented wave of compliant tax payers in future.

NPA Provisioning

A healthy industry is the backbone of a strong economy. In the interest of Industrial Revival post Covid-19 NPA Provisioning norms must be suspended for at least 12 months.

During this period of Economic Halt-for most industries, and in particular MSMEs it is extremely difficult to function (how to maintain production, how to sell when transport has been suspended, how to ensure safety of workers) it is extremely difficult to even pay salaries.

Simultaneously, due to the recent and ongoing NPA crisis in our country, MSMEs are already struggling to service their banking dues. Banks in turn, bound by the NPA provisioning norms are focused only on recovery. Consequently REVIVAL/SURVIVAL of India,s domestic industry has suffered greatly.

Banks need to focus on revival and survival of trade and industry instead of remaining focused on their quarterly NPA management in this extraordinary situation. A healthy and stronger customer would make the Banks also strong in the long run.

Use of IB Code for Industrial Revival

The government has been planning to suspend few sections of Insolvency and Bankruptcy Code for at least six months owing to the challenges that businesses are facing due to the Covid-19 pandemic. While suspending section 7 and section 9 is a very welcome step and much needed to prevent forced Bankruptcies, we do need to ponder over the preamble of the IB Code which is for quick resolution and revival of all industries in stress.

Section 10 of IB Code is an important tool for quick revival of businesses in decay due to corona virus. Additionally, it is pertinent to recall that the intent of section 29A is to prevent persons who, by their misconduct or fraudulent motives contributed to the default of the corporate debtor, from "buying back" the corporate debtor from the creditors, potentially at steep discounts.

This section has prevented even genuine promoters who faced major setbacks on account of unforeseen circumstances from being given a second chance, thereby rendering Section 10 almost infrustuous.

So Section 29 A of IB Code should be suspended or suitably modified to allow genuine promoters without any tag of wilful defaulter or fraudster to revive their companies in a fast track manner. This is most important for the nation's economic revival Post Corona.

Also, the uncertainties created by Covid-19 in the underlying cash flows of the IBC cases, it is necessary to suspend Section 30 of the Code in the overall interest of the economy and all the stakeholders, as the assessment of the valuation of the Companies as a going concern is to be tougher for all those involved in the process and as such the bidders are thinning down, demanding extension of time or changes in the already agreed terms in view of the global economic shut down. In case this is not suspended it will cause much more economic damage than what is anticipated including in the essential sectors. The negative impact will be much higher than what one can anticipate.

This is an extra-ordinary situation and therefore government needs to take extraordinary decisions to save the job and economic activities.