Three of the significant policies have been dropped for now by the central government as overall revenues shrink because of the COVID-19 effect. One of these policies included the lowering of import taxes on vegetable oils. The coronavirus outbreak has hit the revenue collection of the government severely after a huge amount of capital spending in the last financial year, two sources expressed to media.
The collected of the income tax department contracted by 3.5 percent in the last 11 months and on the other hand the tax collection from other sources had grown only by a small percentage of 3.8 which is in itself a very pressing matter. The coronavirus impact has significantly lowered import volumes of India and has
affected the economy altogether.
India, who has been the largest importer of Malaysian palm oil had planned to lower the tax to 3-7 percent on imports but was massively struck by the January outbreak and was unable to do so. This was a major drawback to the import economy of the country.
Other policies to provide raw food material at subsidized rates have also been dropped by the central government hit by the COVID-19 effect. The government had planned to increase the volume of subsidy of rice and wheat from current 5 kg to 7 Kg which would take an extra investment of $3 Billion.
Further, the central government had also planned on spending an amount of $15.5 Billion to provide 67 percent of the 1.3 billion population of the country, rice and wheat at 10 percent of the market price. The idea of providing vitamin fortified rice to the poverty stricken and under privileged population of the country has also been put on hold. The policy for rice fortification was estimated to take up $5 trillion. Shrinking revenues across all sectors has made the government put a halt to these plans and concentrate on the protection from the virus.
The finance department of the Indian government has detected severe crunches in the economy and has asked all the policy makers to not take up any new policies that involve capital investment as the current policies are getting delayed because of the Coronavirus effect.