The rapidly spreading Covid-19 has derailed the global economy, increasing the chances of a global recession setting in, it said, adding India has already been facing growth deceleration, with GDP growth having fallen to 4.7 % in 3rd quarter of 2019-20.
The impact of coronavirus is likely to pull it down further in the 4th quarter. GDP growth could slide to below 5 % in 2020-21 if policy action is not taken urgently.
In order to improve market sentiments, the government may consider removing Long Term Capital Gains tax of 10 % and fixing the total Dividend Distribution Tax at 25 %.
It has also suggested the RBI may consider relaxing the NPA recognition norms from 90 days to 180 days till September 30, 2020 to provide relief to the industry faced with payment issues as well as pressure on banks to classify loans as NPAs.
